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00:00It's all been about digital for you. You've pumped in billionsof dollars to upgrade your technology. Talk to us now. It's about unlocking value. Does it make sense for you to be spinning off your digital buying from your traditional bank. Haslinda we actually give some guidance. If you remember the last couple of quarterly results that we think that we are in a good position today to actually consider some ofwhat you suggest. If we look at that journey in the last seven years now we've made a concerted effort to digitise the core banking operation. And frankly we've had a tremendous degree of success. We've built a lot of technology muscle. We have extremely good core capability. We see ourselves as a midsize technology company with 10000 engineers in the bank. And so told me that architectures detail strategies of ecosystem possibilities. We've done a lot of that. And you can see that in the growth of our market shares. The improvement in our return on equity broader outreach into our customer base. But as we look forward we do think that thereare a couple of additional opportunities. One opportunities really leveraging our technology staying still participate insome new kinds of businesses and opportunities. In the last year in the course of the pandemic as was justpointed out we use some of that technology muscle to create new business activity. We launched a carbon exchange in partnership with some partners. We launched our crypto exchange in partnership with the Singapore Exchange. We launched a company which focuses on using block chain to reimagine international payments and settlements. Each of these leverages our technology to create new opportunities and new revenue streams. at the same time We also recognized that we have better run up capability inside the bank which is a little bit invisible because it is embedded inside the core bank. Our money transfer business for example. is a great case in point and we have a lot of good volume. It's a profitable business. And if at some stage we could unbundle itfrom the bank and give it life of its own in a separate legal form legal entity we think that that would be a much betterprice discovery and value creation. And so fortunately on the way we have constructed the..... Piyush My might you spin off your digital bank the way some commercial bank is doing. Well some commercial bank not spinning off a digital bank. We think they've they're doing exactly what you've been doing.They've had to spin out and create a holding company for holding a lot of the assets of which the bank will be one. We alreadyhave the structure. That's what I was trying to explain. You we have the structure. We have a holding company. The bank is justone entity in the holding company. We also have a separate company called DBS Innovation which is holding many of our new investments part of the carbon exchange, the crypto exchange all reside inside DBS Innovation and therefore each of these is alegal entity which can actually raise its own capital and be able to create the face of this company separately. Theadditional thing the same commissioner back announce is they would take some components of the old bank and spin that out that potentially spin that out in the future which is not dissimilar to what we've already advised that we might be able to consider doing as well. So the difference might be in the details which parts of the business do think a little bit the spin out and which arenot. You talk about your digital digital exchange. I want to pick upon that. A platform that allows for crypto trading. I'm just wondering what you make of China'sclampdown on digital assets digital trading digital mining. Your thoughts on that.Well I think this whole journey of how we move to a new form of money and a new form of assets is going to take time. These are not easy transitions to make in this nature as money in particular. I think there is a pathway for having digital money but it will obviously face serious headwinds because it comes in the face of monetary policy challenges macroeconomic challenges that give us see and challenges. So a digital tokens as a means of medium of exchange or unit of account will be a little bit choppy at the central bank should have a role to play and probably want to be sure that own CBDCs digital assets asthe store of value. I love bitcoin team ethereum, etc. might also see some choppiness but I do think that given there's a couple ofbillion dollar floating around it's already got some rules. Now if you look at what we've done with our approach we've taken a cautious approach just keeping an eye on this tremendous uncertainty in the regulatory landscape. So we've not created an exchange which is available to everybody in the mass market we've been deliberate. We make it available. Accredited investorinstitutions. Right. And the debate to proceed with it which in a way that allows us to benefit from the regulation than the regulated nature of entity that we are. And so far we're quite pleased with our own progress. Piyush China's clamp down has been the black swan for investors for the most part of the year. How exposed are you to Evergrande and what provisions are you making for it. Now we have no exposure to Evergrande. That's t he short answer. Our own strategy on China for the last several years has been built on building independent credit decisions and creditunderwriting. We don't rely on notions of too big to fail or state support. And so the consequence even through the entirepandemic to make the last couple of years we've kept our noses relatively clean do not had any meaningful or material credit issues the challenges and frankly you a black swan. Some of it is unexpected. The timing wasunexpected. But the notion that over time the Chinese would start putting regulatoryprocesses in place on many of the sort of unregulated sectors. I think that writing was on the wall and even in the last coupleof years the P2P space they've broken regulations or two thousand P2P companies were shut down and they started creatinga set of regulation that other technology sectors. I'd say you over time to see how they can get the more regulated industry broadly. And in some way levels the playing field. Piyush just one final question. I mean despite what you're saying could Evergrande be a systemic risk for the Asian banking industry. Do you see that happening having an impact. I don't think a lot ofAsian banks have a lot of exposure. The exposures in the bond market but the total U.S. dollar exposer is about 20 billion dollars Last I read I don't think this is going to destroying the Asian banking industry. A lot of the exposures are domestic in China. But I do think that you know one thing this might be a seminal moment in is a broader recognition of something that we had been doing for several years. Is it a condition that counterparty risk in China is important and youcan get into some credit issues. And therefore I think a lot of people investors are going to be a much more careful aboutrelying on state support overlaying relying size and and laying on too big to fail.And so that might prove a downturn in terms of the amount of money that flows into China. Indiscriminate. Now if you asked me in the medium term. That's probably a good thing in the short term. I think it might create some degree of disquiet.

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DBS Bank Has No Exposure to Evergrande, Says CEO

Piyush Gupta, chief executive officer at DBS Group Holdings Ltd., Southeast Asia’s largest lender, discusses spinning off the digital banking unit, crypto trading and his strategy for investing in China. He speaks exclusively to Haslinda Amin on “Bloomberg Daybreak: Asia.” (Source: Bloomberg)

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