Publish Date : 13-Apr-2012
DBS Group Holdings will be pumping 2.3 billion yuan ($460 million) into its China unit to fund its rapidly growing business in the country.
The capital injection into DBS China increases its registered capital by close to 60 per cent, the bank said yesterday.
The move is subject to regulatory approvals and will be the first time that DBS is putting in additional capital into its wholly owned China subsidiary since four billion yuan was injected during local incorporation five years ago.
Last year, net profit doubled from the previous year, crossing the 500 million yuan mark for the first time. China is the third-largest revenue contributor to DBS Group, after Singapore and Hong Kong.
Said DBS China chief executive Melvin Teo: \"As one of the first foreign banks and the first Singapore bank to be locally incorporated in China five years ago, DBS has come a long way and established a firm foothold in the areas of corporate banking, trade finance, cash management, treasury and markets, as well as wealth management.\"
DBS said it will be investing in network expansion, headcount growth, infrastructure upgrades, enhancements in consumer and corporate Internet banking platforms, and other technology developments.
There are also plans to expand into new businesses such as commodity trade finance.
Including its latest branch in Chongqing, one of the world\'s biggest cities with 33 million people, DBS China now has 25 outlets.
\"In the few short months since opening, DBS\' Chongqing branch has already had good traction with many state-owned and privately owned enterprises, and also foreign companies operating in China. The bank\'s consumer banking customer base has also been growing steadily and a very large majority of its new customers are mainland Chinese,\" it said.
The bank targets to open about 75 outlets by 2020, subject to regulatory approvals.
DBS is among the 40 or so foreign banks which have incorporated locally since 2007, when China opened up its banking sector.
Many have pumped in hundreds of millions of dollars, racing to expand their presence in the world\'s second-biggest economy.
HSBC, one of the largest investors among foreign banks in China, has invested over US$7 billion in select financial services entities and in the growth of its own operations, including a 19 per cent stake in Bank of Communications (BOCom), a 15.57 per cent stake in Ping An Insurance and an 8 per cent stake in Bank of Shanghai.
HSBC, which has 116 outlets in China, has said it intends to increase its branch network almost eight-fold to 800 in the medium term or boost its current 19 per cent stake in BOCom as regulations are eased.
Rules now limit foreign banks to less than 20 per cent of Chinese banks.
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