The Development Bank of Singapore Ltd (DBS) was established on 16 July 1968 as a public limited company to take over the industrial financing responsibilities of the Economic Development Board (EDB) and began operations on 1 September 1968. Its main function upon its establishment was to finance Singapore’s industrialisation and the government’s urban development projects.1 The bank has since grown to become the largest bank in Southeast Asia with over 280 branches in Asia. It was renamed DBS Bank Ltd in 2003.2
Proposal for a development bank
The proposal for a development bank in Singapore was first mentioned in the report of the United Nations (UN) Industrial Survey Mission to Singapore, led by Dutch economist Albert Winsemius. The UN mission, which came to Singapore in 1960 and 1961 to survey and review Singapore’s industrialisation efforts,3 proposed the setting up of an economic body to lead Singapore’s industrialisation programme. This body would not only work to attract foreign investments into Singapore, but also provide industrial financing and management of industrial estates. The mission recommended that the financing responsibilities of the economic body should eventually be transferred to a development bank.4
On 1 August 1961 the Singapore government formed the EDB to spearhead Singapore’s industrialisation programme.5 As industrialisation efforts progressed, the EDB’s scale of operations expanded accordingly: The statutory board’s total industrial financial commitments had risen nearly tenfold, from S$7.4 million in 1962 to S$73.9 million in 1967.6 As such, the government decided to establish specialised institutions for different roles7 and carried out a series of institutional reforms to the EDB – one of which was the formation of a development bank to take over the EDB’s industrial financing operations.8 The EDB would then focus on industrial promotion.9
In April 1968, then Minister for Finance Goh Keng Swee revealed the government’s plans to form a development bank with equity participation from the public in order to have greater financing for Singapore’s industrialisation project. The bank would be constituted under the Companies Act as a public limited company in which the public, banks and other private companies could own shares.10
Establishment
The DBS was thus officially incorporated on 16 July 1968 and began operations on 1 September 1968. Its main function was to provide loans to manufacturing and processing industries with the aim of supporting the establishment of new industries and upgrading existing ones. The bank also supported development projects such as urban renewal and tourism schemes. In addition, the bank began commercial banking operations on 16 June 1969.11
On 1 September 1968, the DBS took over the evaluation of all loan applications and equity participation proposals from the EDB. The latter’s loan portfolio, which amounted to S$44.6 million,12 was transferred to the DBS in December that year, after the Economic Development Board (Transfer of Assets) Bill was passed in parliament.13
Organisation
The initial staffing of the new bank consisted of former employees from various EDB departments. Hon Sui Sen, who served as the EDB’s chairman until December 1968,14 was appointed as the first president and chairman of the DBS. He was one of 12 members on the bank’s inaugural board of directors, six of whom were representatives of banks and other financial institutions with shareholdings in the company.15
At the invitation of the Singapore government, German credit bank Kreditanstalt für Wiederaufbau (KfW) provided technical assistance to the DBS pertaining to operational and organisational matters in the bank’s early years.16
Share ownership
The establishment of the DBS marked the first time the private sector was allowed to fully participate in the financing of manufacturing and other industrial projects in Singapore.17 With a startup capital of S$100 million, share ownership in its first year of operations comprised the following: S$48.6 million by the Singapore government; S$25.9 million by commercial banks; S$7.6 million by insurance companies and other financial institutions; and S$17.9 million by other companies and members of the public.18
Following its successful share subscription exercise, the DBS’s development finance operations expanded rapidly. By the end of 1969, its financial commitments had totalled S$264.6 million with 96 companies.19
External credit lines
To meet the growing demand for industrial capital, the DBS sought external lines of credit to increase its financial resources. A loan of S$30 million was secured from the Asian Development Bank in 1969 followed by a S$15 million loan from the World Bank in 1970, while another S$8 million loan from KfW was also approved.20
Major development projects
The DBS formed DBS Realty – a wholly owned subsidiary that handled real estate developments – within the first year of its operations.21 One of the first major development projects undertaken by the bank was the DBS Building on Shenton Way, which began construction in August 1969. Completed in 1974 at a cost of S$36.6 million, this office-and-shopping complex consisted of a podium block and three superstructures. The tallest of these was a 50-storey tower block – the tallest in Singapore at the time – that was to be the new headquarters of DBS. Prior to DBS Building’s completion, the bank was located in ICB Building, also on Shenton Way.22
Other notable real estate developments by the DBS included Plaza Singapura (1975),23 Pandan Valley condominium (1978)24 and Raffles City (1986).25
Expansion and growth
In December 1971, the DBS launched its first Asian dollar bond issue, with a value of US$10 million. The first financial entity in Singapore to do so, it signalled a step towards establishing Singapore as an international financial centre.26
A year later, the bank opened its first branch in Singapore. Located in Jurong, Singapore’s first industrial estate, the branch provided a full range of banking services to the public.27 In April 1977, the DBS made its first foray into the international banking scene with the opening of a branch in Tokyo, Japan.28 By 1994, its property arm was acquiring stakes in overseas hotels such as Sri Lanka’s Galle Face Hotel.29
The Islamic Bank of Asia was launched in May 2007 with DBS as a majority stakeholder.30
Acquisition of POSB
Over the years, DBS expanded its business operations by establishing subsidiary companies locally and abroad.31 The bank also made various corporate acquisitions, the most notable being the takeover of the government-owned POSB bank and its subsidiaries in 1998 for S$1.6 billion.32
Then-Minister for Finance Richard Hu said that “the move was in line with the government’s policy of encouraging local banks to merge and consolidate their operations in order to develop into sizeable banks to compete internationally”.33 The acquisition was justified on the basis that the government owned a major stake in the DBS, and thus could be entrusted with continuing POSB’s social responsibilities.34
Logo and renaming
DBS launched its trademark logo in 1972. Set against a white backdrop, the mark consisted of a cluster of four inward-pointing red arrows shaped after the caissons of the DBS Building.35
More than three decades after its establishment, the Development Bank of Singapore Ltd was renamed DBS Bank Ltd in 2003 to better reflect its “pan-Asian aspirations”. Its Chinese name was also changed from 新加坡发展银行 (Xinjiapo fazhan yinhang) to 星展银行 (Xingzhan yinhang).36
References
1. Development Bank of Singapore Ltd, Annual Report (Singapore: Development Bank of Singapore Ltd, 1969), 4–6. (Call no. RCLOS 332.12095957 DBSLAR-[AR])
2. Development Bank of Singapore Ltd, “DBS to Officially Align Its Legal Name with Its Brand Name in Third Quarter 2003,” press release, 5 May 2003; “Our Offices,” DBS Bank, n.d.
3. “U.N. Study Team on Industry Arrives,” Straits Times, 1 May 1961, 4. (From NewspaperSG)
4. United Nations Industrial Survey Mission, A Proposed Industrialization Programme for the State of Singapore (Singapore: UN Commissioner for Technical Assistance, Department of Economic and Social Affairs, 1963), 1–3, 118–23. (Call no. RCLOS 338.095951 UNI)
5. Economic Development Board, Singapore, Annual Report (Singapore: Malaya Publishing House, 1963), 1–2. (Call no. RCLOS 338.95957 SIN-[AR])
6. Economic Development Board, Singapore, Annual Report (Singapore: Malaya Publishing House, 1968), 17, 52. (Call no. RCLOS 338.95957 SIN-[AR])
7. Parliament of Singapore, Second Reading of the Jurong Town Corporation Bill, vol. 27 of Parliamentary Debates: Official Report, 21 May 1968, cols. 357–8. (Call no. RSING 328.5957 SIN)
8. Development Bank of Singapore Ltd, First Annual Report 1968 (Singapore: Development Bank of Singapore Ltd, 1969), 4. (Call no. RCLOS 332.12095957 DBSLAR-[AR])
9. “14 Bills Tabled in Parliament,” Straits Times, 4 December 1968, 14. (From NewspaperSG)
10. “Goh Tells of Govt Plans to Speed Up Economic Growth,” Straits Times, 17 April 1968, 8. (From NewspaperSG)
11. Development Bank of Singapore Ltd, First Annual Report 1968, 4–5; Poteik Chia, “This Bank’s Main Business: Loans to Manufacturers,” Straits Times, 2 October 1968, 15. (From NewspaperSG)
12. Development Bank of Singapore Ltd, First Annual Report 1968, 5.
13. Parliament of Singapore, Second Reading of the Economic Development Board (Transfer of Assets) Bill, vol. 28 of Parliamentary Debates: Official Report, 3 December 1968, cols. 18–20. (Call no. RSING 328.5957 SIN)
14. “EDB Says a Big ‘Thank You’ to Former Chief,” Straits Times, 22 December 1968, 7. (From NewspaperSG)
15. Development Bank of Singapore Ltd, First Annual Report 1968, 3.
16. C. K. Lee, “Germans to Study Aid for New Bank,” Straits Times, 8 October 1968, 8. (From NewspaperSG)
17. “‘Filling a Gap, Not Competing with Others’,” Straits Times, 2 October 1968, 15. (From NewspaperSG)
18. Development Bank of Singapore Ltd, First Annual Report 1968, 5.
19. Development Bank of Singapore Ltd, Annual Report 1969 (Singapore: Development Bank of Singapore Ltd, 1969), 9. (Call no. RCLOS 332.12095957 DBSLAR-[AR])
20. Development Bank of Singapore Ltd, Annual Report 1969, 14.
21. “DBS Needs More Funds to Boost Industry,” Straits Times, 14 August 1969, 9. (From NewspaperSG)
22. Tan-Yeoh Chee Koon, ed., Let Us Be Distinctively DBS: 20 Years, 1968–1988 (Singapore: DBS Bank, 1988), 4–5, 14, 32. (Call no. RCLOS 332.12095957 DEV)
23. Hon Sui Sen, “The Official Opening of Plaza Singapura,” speech, 16 August 1975, transcript, Ministry of Culture. (From National Archives of Singapore document no. PressR19750816a)
24. “Pandan Valley Condominium,” Straits Times, 7 June 2008, 107. (From NewspaperSG)
25. “A Grand Opening for Raffles City,” Straits Times, 3 October 1986, 3. (From NewspaperSG)
26. “Pledge to Develop Asian Dollar Market into a Global Centre,” Straits Times, 23 December 1971, 2. (From NewspaperSG)
27. “Jurong Heralds Entry into Active Banking,” Straits Times, 1 December 1972, 36 (From NewspaperSG); Tan-Yeoh, Let Us Be Distinctively DBS, 5, 31–32.
28. “Need for DBS to Be in Key Financial Centres,” Straits Times, 21 April 1977, 9. (From NewspaperSG)
29. “DBS Land Signs Deal to Restore Sri Lankan Landmark,” Straits Times, 19 April 1994, 36. (From NewspaperSG)
30. Grace Ng, “DBS Invests $380m in S’pore’s First Islamic Bank,” Straits Times, 8 May 2007, 52. (From NewspaperSG)
31. Development Bank of Singapore Ltd, Annual Report (Singapore: Development Bank of Singapore Ltd, 1998), 28–29. (Call no. RCLOS 332.12095957 DBSLAR-[AR])
32. Tan Li Eng, “DBS Bank, POSBank to Merge,” Straits Times, 25 July 1998, 1. (From NewspaperSG)
33. Tan, “DBS Bank, POSBank to Merge.”
34. Parliament of Singapore, Second and Third Readings of the Post Office Savings Bank of Singapore (Transfer of Undertakings) and Dissolution Bill, vol. 69 of Parliamentary Debates: Official Report, 12 October 1998, col. 1027. (Call no. RSING 328.5957 SIN)
35. Tan-Yeoh, Let Us Be Distinctively DBS, 5.
36. Development Bank of Singapore Ltd, “DBS to Officially Align Its Legal Name.”
Further resources
“DBS Land Goes into Industry,” Business Times, 21 November 1981, 12. (From NewspaperSG)
Economic Development Board, Singapore, Annual Report 1969 (Singapore: Malaya Publishing House, 1968). (Call no. RCLOS 338.95957 SIN-[AR])
Economic Development Board, Singapore, Annual Report (Singapore: Malaya Publishing House, 1962). (Call no. RCLOS 338.95957 SIN-[AR])
Edgar H. Schein, Strategic Pragmatism: The Culture of Singapore’s Economic Development Board (Cambridge: MIT Press, 1996). (Call no. RSING 338.95957 SCH)
“Local Banks Finance Variety of Projects,” Straits Times, 11 February 1968, 10. (From NewspaperSG)
W. G. Huff, The Economic Growth of Singapore: Trade and Development in the Twentieth Century (Cambridge: Cambridge University Press, 1994). (Call no. RSING 338.95957009 HUF)
“Workers Who Strive, Good Managers Who Look Well Ahead,” Straits Times, 16 May 1968, 10. (From NewspaperSG)
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