DBS announced that CEO Richard Stanley has been diagnosed with Leukemia and he will be taking 3 to 6 months leave of absence. The diagnosis confirmed that the ailment is treatable and full remission is possible.

Koh Boon Hwee, DBS Chairman, will take on the active management role in the interim. He was acting CEO of the bank from Sep-07 to Apr- 08, after Jack Tai’s departure. We do not expect issues with operational continuity at the bank due to CEO’s leave of absence. A case in point was deft handling of SIV related issues and unwinding of ROSA, which took place in 4Q07/1Q08 under the interim CEO.

We continue to maintain OW on the stock and fundamentally we see limited reasons for a change of view. However, we do not rule out the possibility of adverse stock price reaction and an overhang in the near term, as investors were gaining confidence on longer term strategy of the bank. We recommend adding positions on any share price weakness.