DBS (Development Bank of Singapore)

[CityFarmer]

It shouldn't be a surprise...

DBS drops $8.3 bil Danamon bid after failing to win control

DBS Group Holdings ended a bid to acquire PT Bank Danamon Indonesia for US$6.5 billion ($8.3 billion) in what would have been Southeast Asia’s largest banking takeover after failing to win regulatory approval for a majority stake.

The agreement with Danamon’s biggest shareholder, Temasek Holdings, will lapse after tomorrow’s deadline, Singapore- based DBS said in a statement today. Southeast Asia’s largest bank had offered on April 2, 2012, to buy 99% of Danamon -- including a 67% stake from Temasek -- for 66.4 trillion rupiah ($8.3 billion).

The deal’s failure poses a setback for DBS Chief Executive Officer Piyush Gupta’s ambitions of expanding in faster-growing countries to reduce reliance on lending in Singapore, Southeast Asia’s least-profitable loan market. The acquisition had been delayed for more than a year after Indonesia implemented new bank ownership rules that limit DBS to a 40% stake.

http://www.theedgesingapore.com/the-dail...ntrol.html

[desmondxyz]

what a shame....

[Ben]

what a shame....

Why is that so? In fact I m rather please that they gave it up instead of going ahead with the 40% stake. The CEO to me is rather pro shareholders in this instance. Kudos to him.

[safetyfirst]

It would be a bigger shame if we gave in.. Although i am not a shareholder of dbs, i am glad they didnt increase the bid

[CityFarmer]

Further update on Danamon deal...

DBS’s Gupta faces five-year lag in Indonesia without Danamon

DBS Group Holdings Chief Executive Officer Piyush Gupta, pulling his US$6.5 billion ($8.3 billion) bid for PT Bank Danamon Indonesia, said his ambitions in Southeast Asia’s largest economy may be set back by about five years.

“I’m very bullish on Indonesia,” where DBS’s profit has tripled in the past three years, Gupta said at a press briefing in Singapore, a day after saying an agreement to acquire the nation’s sixth-largest lender from a Temasek Holdings Pte unit will lapse. “With the Danamon thing off the table, we will redouble our organic efforts in Indonesia.”

http://www.theedgesingapore.com/the-dail...namon.html

[Ben]

As reported, Indonesia’s economy grew at its slowest rate for almost three years in the second quarter and its currency has depreciated quite significantly. It seems a blessing in disguise that DBS failed to get Danamon. Beside, Thailand is also in a technical recession which DBS don't have a presence as compared to OCBC and UOB.

Wanted to add one more lot today but didn't get it. My queue is just one bid shy of the trading price then but I just refused to up my bid. Well, maybe it will be even cheaper tomorrow. Will keep a watchful eye on this one.

[KopiKat]

Reminds me of Microsoft bidding for Yahoo... Steve Ballmer looked smart when the market crashed after he abandoned the bid...
Gupta would have looked smart now if he'd not said that part about 5 years lag... If his bid had been successful, he may end up facing a 10 years lag... Hee..

Only time will tell...

[yawnyawn]

From CIMB's August report

DBS had some NPLs coming from its India portfolio in 1H13. We estimate
that India accounts for 4-5% of group assets and DBS said that the Indian
SME book accounts for ~6% of its Indian loan book. This implies that the
current problem area in DBS (Indian SME) is only 0.3% of assets.
However, if India’s economic problems broaden out to the rest of the
country’s economy, NPLs could rise further. DBS said that 40% of the
Indian book is trade finance, 50% is Indian corporates, and 10% is Indian
SMEs. Theoretically, current NPL problems could broaden out to the larger
Indian corporates (~2.2% of assets), bring up its problematic loans in India
to about 2.5% of assets; potential pushing up DBS’s NPLs higher than
peers. We rate DBS as Outperform, with a DDM-based target of S$19.07.

[CityFarmer]

DBS, may be due its controlling shareholder's backing, has a first mover advantage in the FTZ...

DBS Bank gets approval to set up branch in Shanghai FTZ

DBS Bank (China) is one of two foreign banks that have received approval from the China Banking Regulatory Commission Shanghai Bureau to set up a sub-branch in the newly-established China (Shanghai) Pilot Free Trade Zone (FTZ). The other bank is Bank of Communications Co.

Eight other domestic banks joined the two foreign lenders with licenses to operate.

The DBS sub-branch will focus on servicing corporate clients in the FTZ at its first stage, complementing and strengthening the bank's established network in Shanghai.

The zone “is an important milestone in China’s efforts to build an international financial center and to reform and reinvigorate its economy for longer term economic viability,” DBS Bank (China) Chief Executive Officer Neil Ge said in an e-mail release.
http://www.theedgesingapore.com/the-dail...i-ftz.html

[CityFarmer]

DBS sells remaining Philippine bank stake for $850 mil

DBS Group Holdings, Southeast Asia’s largest lender, agreed to sell its remaining stake in Bank of the Philippine Islands for $850 million to focus on key markets including Singapore and Hong Kong.

The transaction, to be completed in two phases ending in March, will generate a gain of about $447 million over the carrying value, DBS said in a statement yesterday. The 9.9% indirect ownership will be acquired by GIC Pte, Singapore’s sovereign wealth fund, and Ayala Corp., the Philippine company that is already BPI’s largest stakeholder.

DBS began exiting its 14-year investment in BPI, the largest lender by market value in the Philippines, in October as Chief Executive Officer Piyush Gupta sought to bolster capital buffers. Growth in the Philippine economy, which has expanded by more than 7% for four quarters, may slow this year after Typhoon Haiyan devastated some provinces.

“In the last two years, the Philippines became a very hot market,” Kenneth Ng, a Singapore-based analyst at CIMB-GK Securities Pte, said by telephone. “One of the reasons why they sold was that the rising Philippine market gave them the opportunity to do so.”
...
http://www.theedgesingapore.com/the-dail...0-mil.html