【High-end Interview】New Opportunities Drive Strong Business Growth in China and Invest Intensively – Interview with DBS China President Zheng Sizhen

Xinhua Finance Shanghai, May 14 (Reporter Wang Shujuan) increased its stake in Shenzhen Rural Commercial Bank to become the largest shareholder, and set up DBS Bank's third fintech R&D center in the world in China...... Recently, DBS has made frequent moves in the Chinese market, which reflects DBS' determination and continuous investment in the Chinese market.

"New opportunities are driving strong growth for DBS in China, and we will continue to invest more in the future." In a recent interview, DBS China President Cheng Sizhen said that DBS has benefited from the openness of China's financial market over the past 30 years, and DBS China is positioned to be deeply involved in the development of China's financial market, coordinating DBS' resources and network in the global region to provide differentiated financial support for the development of China's new quality productivity.

Continue to increase investment

DBS Bank is the largest shareholder of Shenzhen Rural Commercial Bank. At the end of 2023, DBS further increased its stake in Shenzhen Rural Commercial Bank, increasing its current stake in Shenzhen Rural Commercial Bank from 13% to 16.69%. "Our investment in Shenzhen Rural Commercial Bank has exceeded RMB7 billion, which is an important strategic investment for us to complement DBS China's business, and we currently have a lot of in-depth cooperation in the cross-border wealth management connect business." Zheng Sizhen said.

DBS also joined hands with the Postal Savings Bank of China to invest RMB450 million to become the second largest shareholder and the only foreign shareholder of China Post Consumer Finance. In addition, DBS Securities, which officially opened in Shanghai in June 2021, is currently the only joint venture brokerage from the ASEAN region. DBS Bank holds 51% of the shares, while the remaining Chinese shareholders hold 49% of the shares. With the deepening of the business, Cheng Sizhen revealed that DBS plans to further increase its stake in DBS Securities in the future.

Earlier this year, DBS China was approved as an underwriter of debt financing instruments for non-financial enterprises in the China Interbank Bond Market, allowing it to underwrite all types of debt financing instruments.

"This will help us guide international bond issuers and investors to join China's bond market, and at the same time, it will also allow the international market to see the firm pace of China's financial market opening up and its confidence in adhering to high-quality economic development." Zheng Sizhen said that at present, "panda bonds" are very active, and the market demand is very high.

DBS China's bond underwriting business has grown rapidly in recent years, with a strong performance in the areas of sovereign, super-sovereign panda bonds, local bonds and financial bonds. In March 2024, DBS China, as a member of the underwriting syndicate, successfully assisted a subsidiary of CapitaLand in the issuance of the first RMB1 billion sustainability-linked panda bond in the interbank bond market. The bond is subscribed at a multiple of 1.65 times, and 50% of the investors have overseas backgrounds. This is the first sustainability-linked panda bond issued by a Singaporean company, the first panda bond issued by an ASEAN company since the RCEP agreement came into effect, and the first bond issued by CapitaLand Investment in the Chinese bond market.

Empower enterprises to "go global" and help the internationalization of RMB

In February 2024, DBS China completed the cross-border collection of Indonesian rupiah for a GBA company with roots in the Indonesian market, and entered into a RMB/IDR exchange business with it. The resulting FX position was flattened in the RMB/IDR regional market. This is one of the first transactions since DBS was granted a licensed RMB/IDR cross-currency market maker bank.

This is a footnote to DBS' active participation in the internationalisation of the RMB, which has long been actively promoting the development of an ecosystem for the cross-border use of RMB in multiple markets around the world.

"Chinese companies have a lot of business in Indonesia, if the rupiah wants to settle into RMB, it used to be converted through the US dollar, but now the two central banks of China and Indonesia are swapped, DBS Bank is one of the participating banks, and enterprises can directly exchange the rupiah into RMB through DBS Bank, without going through the US dollar, so there will be great savings in exchange rate costs." Zheng Sizhen said.

DBS was one of the first direct participants in CIPS and one of the foreign shareholders. As of the end of March 2024, DBS China's CIPS business volume increased by 67% year-on-year, ranking among the top foreign banks, according to Cheng.

"The size of RMB payments from DBS China to ASEAN countries has also increased by more than 20% year-on-year, which means that the scale of RMB settlement in the economic and trade exchanges between ASEAN and China is getting larger." Zheng Sizhen pointed out that since last year, the demand for cross-border use of RMB has been increasing, and the current market conditions are a good opportunity and window for the deepening of RMB internationalization, and the internationalization of RMB will be further enhanced in the future.

Over the past 30 years since DBS entered China with the help of the financial opening-up policy, DBS has actively used its global resource advantages to escort Chinese enterprises to "go global". Zheng Sizhen said that DBS has comprehensive advantages in overseas services, in addition to providing financing, cash management, foreign exchange and other financial services, it can also help enterprises integrate into the local business environment, connect with government relations, and give advice on political and legal risks.

Zheng Sizhen observed that unlike large enterprises going overseas in the past, there are more and more small and medium-sized enterprises in the wave of Chinese-funded enterprises going overseas at this stage. "From the perspective of maintaining the resilience of the supply chain, more and more companies are investing overseas, especially in Southeast Asia. Over the past 30 years, we have accompanied and served many Chinese enterprises to go overseas, and with our rich experience and global resource network, the growth of related cross-border financial business is very good. ”

From the strong growth trend of the business, Zheng Sizhen feels the pulse of China's economic recovery. "We are confident in China's economic prospects, and the growth in the scale of our trade-related financing in the first quarter has been very good."

Seize new opportunities in the wealth management market

In recent years, China's wealth management market has moved towards a more globalized, standardized, digital and ecological direction, and more and more foreign institutions have taken a more active attitude in China's wealth management industry. DBS Bank serves the high-end wealth management crowd in the Chinese market, with a focus on serving high-end customers. Cheng said that since 2023, DBS China's personal wealth management performance has grown strongly.

"In 2023, our wealth management fee income increased by 55% compared to 2022. The growth in the number of new customers was very strong, with Harvest wealth management customers with assets of more than 1 million yuan increasing by 38% quarter-on-quarter. In addition, new money inflows from customers have also been strong, with 2.6 times the size of 2023 compared to 2022. Zheng Sizhen told reporters that this trend is continuing, and in the first quarter of 2024, the number of new customers and new capital inflows will still maintain strong growth.

"It's about market trends and it's about how we are positioned. We are positioned as a 'wealth management expert from Singapore', and with the fundamentals of the domestic wealth management industry and the professional and stable advantages of foreign banks highlighted, we can help our clients explore the business opportunities and potential of the Asian market." Zheng Sizhen said that in the volatile domestic market and low-interest rate environment, mainland customers have increased demand for high-interest fixed deposits and income-based financial products.

In February this year, the new version of the Cross-boundary Wealth Management Connect was officially implemented, which not only lowered the access conditions for investors, increased the quota for individual investors, but also broadened the scope of the pilot business. This means that investors can purchase more and more cross-border products through foreign banks, and DBS has seized business opportunities in the process. Shenzhen Rural Commercial Bank is the first rural commercial bank in China with the qualification of "Cross-boundary Wealth Management Connect-Southbound Connect". Through in-depth cooperation, DBS Bank has actively launched competitive wealth management products.

According to data disclosed by the Guangdong branch of the People's Bank of China, in March this year, 24,288 new individual investors participated in the "Cross-boundary Wealth Management Connect" in the Guangdong-Hong Kong-Macao Greater Bay Area, a significant increase of 9.16 times compared with February, and the number of new account openings in a single month reached a new high.

"In addition to traditional time deposits, we have added more income-based products, and the cross-boundary wealth management connect market has responded enthusiastically, bringing more choices to domestic investors, and we will continue to actively promote related businesses in the future." Zheng Sizhen said.

Editor: Xing Lisha

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