Analysts say markets likely to take DBS CEO's death in stride

By Mok Fei Fei, 938LIVE | Posted: 11 April 2009 1643 hrs


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Richard Stanley


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SINGAPORE: Analysts say financial markets are likely to take the demise of DBS CEO Richard Stanley in their stride.

Mr Stanley died Saturday morning after a battle with cancer. He was diagnosed with leukaemia - a cancer of the blood and bone marrow - in late January and had been responding well to treatment.

But his condition took a sudden turn for the worst on Friday.

While his death will weigh heavily on those who knew him, market sentiment will likely be muted.

After a lengthy search, Mr Stanley, the former head of Citigroup China's business, stepped in to helm DBS in May 2008 amid much anticipation.

Questions abound about how different the American will be from his predecessor Jackson Tai, who announced he was leaving DBS in September 2007.

Although he was CEO of DBS for only about nine months, Mr Stanley made many critical and strategic decisions during his short tenure.

The 48-year-old helped the lender to raise S$4b through a rights issue, cut 6 per cent of its staff on a cost-reduction move, and focused on organic growth.

As the lender takes on the task of searching for a new CEO yet again, head of research at CIMB-GK, Kenneth Ng, thinks DBS will probably continue Mr Stanley's strategy for now.

Mr Ng said: "It will really depend on who comes in to take charge, but I think his plan has already been set in motion. We can see evidence of it, such as the emphasis of the POSB brand and less lending to the foreign banks in the SIBOR market. I think this is a good move for DBS, I think in the interim, while they are looking for somebody to take over, this current strategy will probably continue."

CIMB-GK also does not think the market will react too adversely to this latest development, as DBS share price was hardly affected when it was announced that Mr Stanley was diagnosed with leukaemia in January.

Fundsupermart's general manager, Wong Sui Jau, agrees: "Actually, I don't think the impact will be that big because the diagnosis of him having leukaemia has been known for a while already and his other lieutenants will probably be handling on his behalf some of the main duties of DBS' management already. In any case, I'm quite confident the board will be able to find another replacement for his position."

Analysts add that DBS may have an easier time looking for a new CEO now as there is more excess capacity of resources given the depressed financial markets.

During Mr Stanley's absence, his duties at DBS were covered by the bank's chairman Koh Boon Hwee.

- CNA/ir