WHEN new DBS Group Holdings chief executive (CEO) Richard Stanley takes over the helm today, he will be greeted by a welcome lunch - and a plate full of challenges.

These range from softening financial markets to the need for the bank to build up a new team after a recent spate of departures of senior executives.

Mr Stanley, 47, an American, previously headed Citigroup China's business. He is taking over from Mr Jackson Tai, also an American, who stepped down at the end of last year after five years in the top job.

Mr Stanley is joining DBS at a time when an uncertain economic outlook for Singapore and the rest of the region may dent DBS' growth this year and even next year, say analysts.

The sub-prime mortgage crisis and recession in the United States have cast a pall on growth in the region.

Kim Eng analysts said in a report last month that DBS' net interest margins will be under pressure as Singapore interbank rates trend downwards, in line with declining interest rates in the US.

DBS faces several pressures on its business such as softer commercial banking and financial markets, which have driven 60 per cent of the bank's growth over the last two years, said Morgan Stanley analyst Matthew Wilson in a report last month.

But there are more strategic issues that the new CEO is expected to address during his staff meetings, such as whether to move the bank's focus more towards maximising the potential of its consumer banking franchise, say analysts.

Another question on the minds of investors, staff and analysts will be how Mr Stanley intends to expand DBS as a regional player and whether he will use acquisitions to drive an integrated Greater China strategy.

'Everyone in DBS will be looking to see what masterplan Richard Stanley has for tapping growth in the China-Hong Kong-Taiwan triangle now that they have bought Bowa Bank in Taiwan,' said an analyst from a foreign bank.

While tackling DBS' growth and expansion strategy in the region, Mr Stanley is also likely to inject fresh blood into the bank, which has seen four senior executives leave in the past few months.

In February, chief operating officer Frank Wong said he would retire at the end of the year. Earlier last month, news broke that Mr David Lau, managing director and joint head of global financial markets, is leaving to set up a private hedge fund.

Yesterday was the last day at work for DBS' head of advisory sales in the global financial markets division and regional head of the investment product group, Mr S.F.Wong, who is retiring. He will be replaced by an internal candidate.

DBS' consumer banking head Edmund Koh, together with two colleagues - Mr Raymond Ang, the chief operating officer of consumer banking, and senior vice-president Chew Mun Yew - also left the bank recently. All three joined US private equity group Carlyle to run a Taiwanese bank.

And earlier this month, Ms Agnes Chen, who heads DBS' deposit, investment and insurance strategy businesses in consumer banking, said that she was retiring after five years at the bank.

Mr Stanley is likely to bring in his own troops and will have his hands full building up a cohesive new team to steer DBS through the next few years.

DBS will undergo the pressure of some changes with a new CEO, said Morgan Stanley's Mr Wilson.

'The first year for new CEOs is typically moving quickly to assemble their own team, buttress the balance sheet to erect a platform for future earnings growth and increase legacy building prospects - a year of change...not growth.'

This article was first published in The Straits Times on May 1, 2008.