Shares of DBS, Southeast Asia's biggest bank, rose 3.5 percent on Monday, as a broad rally in banks offset news of the death of CEO Richard Stanley, and investors showed faith in the bank's experienced chairman.
Analysts said DBS, may take time to select a new CEO who could steer the bank through a global economic downturn that has badly affected its two key markets in Singapore and Hong Kong.
"The key element would be to find someone who could drive DBS through the current turmoil and position the bank to take advantage of the opportunities that the turmoil is throwing up," said an analyst at a foreign bank, who declined to be identified because of the sensitive nature of the news.
Stanley, the former chief of Citigroup's China operations, was widely expected to boost DBS's China business and pursue acquisitions beyond its key markets, which eluded his predecessor. But instead of buying banks, he opted to build DBS's existing businesses in China, Indonesia, Taiwan and India.
"We never got a sense he wanted to aggressively go into China," said David Lum, an analyst at Daiwa Institute of Research. "His focus was on organic growth and he wanted to boost market share in Hong Kong and Singapore."
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Most analysts said investors trust the bank's current chairman Koh Boon Hwee to lead DBS while the board searches for a successor. Koh has taken on a more active management role since DBS announced in January that Stanley had leukemia.
Finance Minister Tharman Shanmugaratham told the state broadcaster that DBS, which is 28 percent-owned by state investor Temasek, should not rush its search for a new chief.
"The senior management had been running the bank, putting all their time into it. That is the way it will continue for a while, while they embark on a search," he said. "This is something the board has to decide on, but I do not think there is a need for them to rush."
Stanley, a 48-year-old American, joined DBS last May. He had been suffering from leukemia and died on Saturday from an infection. Singapore's benchmark share index was up 2.3 percent at its highest since Jan. 7.