POSB Gets A Boost With $35m Makeover

Source : The Straits Times, Aug 29, 2007

Branches have been refurbished as DBS recognises branding power of 'People's Bank'

DBS Bank is giving POSB a $35-million makeover as part of a major push to revitalise the much-loved 'People's Bank'.

The cash is being spent refurbishing POSB's 49 branches, adding a new one in Suntec City and on a multi-million-dollar ad campaign - and all by the end of the year.

The move marks the biggest commitment by DBS to develop POSB since the banks merged in 1998.

It is also a signal that it has belatedly recognised the enduring branding power of the 130-year-old bank and the strength of its affections among Singaporeans.

'We realised that we actually have a huge, powerful brand in our franchise', said DBS marketing and communications head Karen Ngui.

'I think, perhaps, we might have underestimated the huge amount of equity and the huge amount of emotional engagement that Singaporeans have with POSB.'

The bank is also a money-maker. Despite rising competition for mass market banking, POSB is at its most profitable and continues to grow its already large customer base.

The revamp, which began two years ago, dwarfs previous investments in the brand. In 2001, DBS said it would pump $1 million into the franchise. It went on to spend a further $5 million to $10 million a few years later.

Much of the latest investment has gone into transforming POSB's branches into modern outfits.

They are typically two to three times bigger than in the past, with a floor area of about 2,000sqft.

This allows them to feature more spacious waiting areas, while plasma TVs keep queuing customers entertained and 'menu boards' like those in fast-food restaurants display details about bank services.

So far, 47 branches have been retrofitted, with just outlets in Boon Lay and Woodlands to go under the hammer and saw.

A series of emotive ads will also hit TV screens soon. Focusing on POSB's 'bank next door' image, they will revive that other female national icon - the POSB Girl.

'As the population ages and dies, brands like POSB will die, unless you rejuvenate it,' said DBS regional consumer banking head Edmund Koh.

POSB attracted 100,000 new customers last year, bumping up the total amount of its deposits by 10 per cent.

Currently, about 3.2 million individuals have POSB accounts, and a total of $32 billion in savings is deposited in them.

POSB customers are not just saving but are using credit cards, taking out home loans and buying investment products.

This has helped the bank record its highest profit margins as its costs are now equivalent to 60 per cent of its income, down from 99 per cent in the early years after the merger, said Mr Koh.

'This bank will operate optimally at about 48 to 50 per cent and it will do it very soon,' he said, adding that cross-selling will be key to achieving this.

Analysts said POSB is a very valuable franchise and a strong source of funds. 'Customers of POSB have been customers for a long time. To change branding to DBS would be dangerous,' said an analyst from a foreign bank.

Human resource executive Danny Goh, 30, who has been saving with POSB since young, is glad that the bank is getting a new lease of life. 'The blue and yellow colours, the key symbol, these are all icons, things that I grew up with.'

Said Mr Koh: 'Our unwritten social contract is: We serve everybody. Nobody will be turned away from POSB unless there is criminal intent.'