Singapore’s largest lender DBS bought a 13% stake in Shenzhen Rural Commercial Bank (SZRCB) for S$1.08bn ($800mn), marking its biggest acquisition in China yet. The acquisition is part of its acceleration plans in China’s Greater Bay Area and comes after Beijing eased rules on foreign ownership in the financial services sector. China is among DBS’s six core markets and upon completion, DBS will become the largest shareholder in SZRCB with board representation. The group’s capital ratios are expected to be less than 0.2% impacted due to the acquisition, they said. SZRCB operates one of the largest bank branch networks in Shenzhen with 210 of its 217 branches and over 2,100 self-service terminals located in the region. SZRCB has more than 5mn retail customers, over 170,000 active corporate clients, CNY 404bn ($62bn) of deposits and CNY 519 billion ($80bn) of assets as at end-2020. Separately, sources report that DBS is also bidding for Citigroup’s consumer business in Asia after Citi revealed they were exiting 13 consumer banking markets which includes China, India, Indonesia, South Korea, Malaysia and Philippines.
DBS’s bonds were flat – its USD 3.6% Perp is at 100.7, yielding 1.7% and its SGD 3.98% Perp is at 105 yielding 2.76%.
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