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SCMP Reporter

DBS Group has replaced Philippe Paillart as vice-chairman and chief executive with his deputy, Jackson Tai, just 18 months after the Frenchman took the helm of Southeast Asia's largest financial group.

The change comes a little more than a year after Mr Paillart masterminded the Singapore bank's HK$45 billion takeover of Dao Heng Bank Group, boosting its presence in Hong Kong.

The Dao Heng deal, the largest bank takeover in the SAR, helped to broaden DBS' base beyond its relatively small home market, but was criticised by many analysts' as being too costly.

DBS said in a statement late yesterday that Mr Paillart was 'stepping down for personal reasons'. His departure, however, comes after a series of gaffes, strategic setbacks and reams of poor publicity.

Mr Paillart's exit - he is due to leave DBS on June 30 - comes several months after DBS chairman S. Dhanabalan was forced to issue a public endorsement of his chief executive when rumours surfaced that he was set to be ousted.

Mr Dhanabalan last night thanked Mr Paillart for his 'valuable strategic and marketing insight'.

The chairman added that the reshuffle, which included other high-level changes, would help to bring 'higher returns to our shareholders'.

Mr Paillart was unavailable for comment.

Under Mr Paillart's stewardship DBS failed last year in a heated takeover battle for fellow Singapore lender Overseas Union Bank (OUB), which was snapped up by family run rival United Overseas Bank (UOB).

The takeover battle saw DBS embroiled in an embarrassing public row with UOB and OUB executives over contentious remarks prepared by its adviser, US investment bank Goldman Sachs. DBS was forced to issue a public apology in Singapore newspapers for the comments, which originally appeared in takeover documentation prepared by Goldman. DBS paid S$2 million (about HK$8.73 million) in compensation.

Mr Paillart was forced further on to the defensive when it was reported last year that his personal details listed in the bank's annual report were inaccurate. Mr Paillart said the listing was an unintentional mistake.

DBS said Mr Tai, an American who previously held the posts of president and chief operating officer, would become vice-chairman and chief executive.

In other changes, DBS said Frank Wong Kwong-shing had been appointed to the new post of chairman for Hong Kong operations. Mr Wong will oversee investment banking and securities in addition to his role as head of treasury and markets.

In his new role Mr Wong will manage all DBS operations in the SAR, which include DBS Kwong On Bank as well as Dao Heng.  Assisted by Dao Heng chief executive Randy Sullivan, Mr Wong will 'oversee the implementation of DBS' Greater China business strategy', the bank said.

Ng Kee Choe, head of risk management and a 'senior banker' for Singapore, will oversee information and operations, the statement said.

Mr Dhanabalan said: 'We are confident that Jack [Tai] will continue to drive the bank towards better productivity, even better customer service, and stronger discipline in expense management.'

The DBS cost-to-income ratio has run far ahead of its peers in recent years.

Mr Paillart first joined DBS in July 2000 as senior managing director for consumer banking from Ford Motor Credit Company. He was appointed chief executive in January last year, replacing John Olds.

Mr Tai joined DBS in July 1999 as chief financial officer after a career with JP Morgan.

Government-linked DBS is one of Singapore's most high-profile and influential companies.

Ministers often hold up its non-Singaporean management personnel as an example of the type of skilled foreign talent that the city-state needs to attract as it seeks to grow its companies.

Graphic: dbs24gbz



DBS dumps chief executive