DBS financed the deal using internal cash resources. Credit: TK Kurikawa/Shutterstock.

Singapore’s DBS Group Holdings’ (DBSH) fully owned subsidiary, DBS Bank (DBS), has purchased additional stake in Shenzhen Rural Commercial Bank Corporation (SRCB).

With this latest transaction, DBS has increased its stake from 16.69% to 19.40%.

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The move aligns with the group’s strategy to focus on its core markets as well as broaden its presence in the Greater Bay Area.

DBS initially acquired a 13% stake in SRCB in October 2021, raising its investment to 16.69% in January 2024.

On 8 November 2024, DBS entered agreements with Shenzhen Shekou Dawah Real Estates Development and Shenzhen Shekou China Merchants Harbour Engineering to purchase their combined 2.71% stake in SRCB.

As part of the transaction, DBS acquired 281.6 million SRCB shares at 5.67 yuan apiece.

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This is equivalent to 1.05 times SRCB’s book value per share for Q3 2024, with the total consideration amounting to 1.596bn yuan (S$295m).

DBS financed the deal using internal cash resources.

In an exchange filing, the bank said that the deal “was arrived at on a willing-buyer, willing seller basis, taking into account, among others, the book value of SRCB.”

The transaction is anticipated to be immediately accretive to earnings and return on equity. It will have an impact of less than 0.1 percentage points on the consolidated capital ratios of DBSH and its subsidiaries.

Meanwhile, in November last year, Reuters reported that DBS Group is weighing stake acquisitions in local banks in Malaysia.

According to the report, it is specifically targeting stake in Alliance Bank Malaysia and Kuwait Finance House‘s Malaysian retail banking assets.