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The Development Bank of Singapore (DBS) has emerged as a dark horse in the bidding for Korea Exchange Bank, which closed on Monday. Pundits had expected two competitors, the nation¡¯s largest lender Kookmin Bank and the Hana Financial Group, but Singapore¡¯s biggest lender is adding excitement to the race.
The move caught other bidders on the back foot. ¡°We never thought DBS would do that,¡± an executive working on the Kookmin Bank bid admitted.
But DBS has shown a great deal of interest in entering the Korean financial market. In 2001 it took part in the inspection process when part of KEB Credit Card was sold but dropped out of the final bidding.
The Singaporean bank will not find it easy to take over KEB on its own. DBS¡¯s total profits last year stood at US$1.6 billion, but it will take more than $6 billion to take over KEB.
That one of DBS¡¯ large shareholders is Temasek Holdings, the Singapore government¡¯s investment arm, could be a stumbling block to approval from Korea¡¯s financial regulators even if DBS is designated as a preferred bidder. The Financial Supervisory Service has classified Temasek as a ¡°non-financial player¡± which cannot be a large shareholder of bank.
That is why some financial experts say DBS is making a feint to get more from Hana, with whom it originally planned to create a consortium to participate in the bidding. ¡°It is highly likely that DBS chose to go its separate way because it didn¡¯t feel its own interests were served in negotiations with Hana to create a consortium,¡± a financial industry source. ¡°But even if DBS takes part in the bidding for KEB, it¡¯s unlikely that it will be able to take over on its own.¡±
(englishnews@chosun.comm )
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