By Fiona Chan, ST
DBS Bank has sold off one of its subsidiaries, a China investment company, to a unit of Temasek Holdings for US$32 million (S$44.5 million).
The lender, South-east Asia’s largest, yesterday said it agreed to sell DBS (China) Investment to Temasek’s Edgefield Investments.
This comes after DBS last year obtained a licence to sell yuan-denominated investment products directly to Chinese customers. It got the green light to offer savings, call deposits, time deposits, mortgages and general insurance products.
With this, DBS no longer has a need for the investment company, which was meant to hold investments and liaise with customers and prospects. It was set up in December 2005 in Beijing under the Ministry of Commerce with a registered capital of US$30 million.
A DBS spokesman yesterday said it was ‘appropriate’ to divest itself of its investment in DBS (China) Investment now that the bank had obtained the China licence.
Yesterday, Temasek also confirmed that it had acquired the China company. In response to queries on why it had done so, a Temasek spokesman said the purchase would provide Temasek with ‘another platform to explore investment opportunities in China’.
China is ‘a market we continue to believe has good potential and which we remain interested in’, the spokesman added.
Temasek will pay cash for the deal, which takes into account DBS (China) Investment’s net tangible assets and operating expenses.
As at Dec 31 last year, the book value of the firm was about US$30 million and the net tangible assets were about US$31.26 million.
The deal is expected to be completed on May 30. It is not material in the context of the operations of DBS’ holding company DBS Group Holdings, the bank said in a statement.
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