S'pore to bar foreign takeovers of local banks

S'pore to bar foreign takeovers of local banks

SINGAPORE (AFP): The Monetary Authority of Singapore (MAS) said Thursday it will bar foreign investors from taking over any local bank but may allow them to have a "strategic" stake.

"As we have stated previously, MAS will not permit a foreign takeover of a Singaporean bank at this time, but is open to other possibilities," the de facto central bank said in a written response to media queries.

"We welcome strategic stakes by foreign banks in local banks where such alliances lead to a strengthening of the local banks," it added.

The central bank's statement followed frenzied developments in the domestic banking sector toward possible mergers among the five domestic banks in line with a government call to consolidate.

The MAS said it will make an announcement later this week on the liberalization of the domestic banking sector.

The authority has been urging local banks to consolidate if they are to compete with bigger players in a globalized economy.

DBS Group Holdings Ltd., which owns Singapore's largest bank DBS Bank, launched a hostile takeover of rival Overseas Union Bank (OUB) last week, offering cash and shares totaling US$5.2 billion.

A week before that, Oversea-Chinese Banking Corp. Ltd. (OCBC) announced a takeover bid aimed at Keppel Capital Holdings Ltd. which owns Keppel TatLee Bank, the smallest of Singapore's five homegrown banks.

There have been rumors that United Overseas Bank (UOB), which had not made any moves, would engage OCBC in a bidding war for Keppel Capital.