SINGAPORE: As heightened macroeconomic and geopolitical uncertainty continues plaguing the world, the new CEO of Southeast Asia’s largest bank told CNA on Thursday (May 8) that businesses could look to Asia for growth prospects. Those anxious about trade tensions triggered by the United States’ tariffs blitz should “look at new opportunities” in the longer run “where they can grow”, said Ms Tan Shu Shan, who took the helm of DBS about a month ago. “If (companies) are going to suffer from trade flows to the US… then look within ASEAN and Pan-Asia,” she said, referring to the Association of Southeast Asian Nations. “Where we are seeing growth is Northeast Asia to South Asia, particularly to India – we’re seeing good structural growth there.” Ms Tan pointed to India’s beefing up of manufacturing capabilities to attract big firms like Apple, Foxconn and Samsung. She noted there is also structural growth in trade between Asia and the Middle East, as well as with Europe.
Firms could also take advantage of the volatility in the short run, such as by hedging interest rates or currencies, Ms Tan added in a wide-ranging interview with CNA. She said businesses should diversify their supply chains and have alternative payment platforms, as well as a diverse currency mix, to mitigate risk. Investing in generative artificial intelligence (GenAI) helps with productivity, efficiency and staying relevant in a rapidly digitising world, she added.
CHINA HAS BECOME MORE RESILIENT
While China has been the hardest hit by Washington with 145 per cent tariffs imposed on Chinese goods entering the US, Ms Tan said Beijing looks well placed to weather the storm. “While this is a bit of a blow for consumer confidence, the country rallied behind this need to be resilient,” she said, adding China has learnt to “insulate itself” since US President Donald Trump’s first term in office. There has been a concerted effort to make China self-sufficient in energy, semiconductor chips, technology and food, she noted. Ms Tan added she expects China to continue investing in future-forward technology, including robots, drones, biotech and GenAI. “(In the) longer term, the China growth prospects are still going to be there. You can see the focus on growing and I think its self-sufficiency is going to get stronger.” she said. She noted the world’s second largest economy is already investing heavily in industries surrounding renewable energy such as electric vehicles and batteries. China will continue to invest in the Southeast Asian economies, she pointed out while highlighting strong green energy investment needs for both sides.
DBS Q1 EARNINGS
Ms Tan also spoke about the bank’s first-quarter results, which were released a few hours before the interview. DBS’ net profit in the first quarter of 2025 fell 2 per cent on-year to S$2.9 billion (US$2.24 billion), mainly due to higher tax expenses. It was the bank’s first earnings drop in more than three years, but beat estimates. It was also the first earnings report for Ms Tan as the bank’s head after she succeeded Piyush Gupta last month. Net interest income and fee income rose, driven mainly by strong growth in its wealth management business. “We delivered a solid first quarter,” Ms Tan said, adding the bank saw record fees in wealth management, loans and treasury sales that amounted to a record net profit before tax of S$3.44 billion. She said that as uncertainty persists, the bank will stay nimble and prudently manage risks. She further noted that group net interest income will likely drop this year, based on lower interest rates, to levels slightly above those in 2024. She said the second quarter appears relatively stable, “barring any major tariff-induced accidents”. “There will be some short-term volatility, and we have to remain resilient and stay prepared for the different risks or stress scenarios that might come upon us in the next two or three quarters,” she added.
