According to DBS, the investment is in line with its strategy to invest in its core markets as well as expand its exposure to the Greater Bay Area.
DBS first acquired a 13% stake in Shenzhen Rural Commercial Bank in October 2021 and subsequently increased its stake to 16.69% in January 2024. The consideration represents 1.05 times of Shenzhen Rural Commercial Bank’s book value per share as at its 3QFY2024 results.
The consideration was paid with DBS’s internal cash resources and has a less than 0.1 percentage point impact to DBS’s consolidated capital ratios. The move is also expected to be immediately accretive to DBS’s earnings and return on equity (ROE).
Shares in DBS closed 9 cents higher or 0.21% up at $43.60 on Jan 27.
