Dao Heng Bank yesterday confirmed it was in preliminary talks with investment banks on acquiring Fuji Bank's 51 per cent interest in Kwong On Bank. Managing director Kwek Leng-hai said the bank had been approached by investment banks working on behalf of Fuji Bank, which is seeking a buyer for its Kwong On stake. He said Kwong On was the only retail bank Dao Heng was considering acquiring. The bank would consider issues including pricing, enhancement to its return on equity and scope for further manoeuvring of its core banking businesses before deciding whether to proceed with the acquisition. Mr Kwek said Dao Heng had not been given any deadline to make an offer but he understood a number of banks were also interested in acquiring Kwong On. Citibank, ABN Amro Bank, Bank of East Asia, Bank of America (Asia) and Development Bank of Singapore have also been rumoured to be interested in taking control of Kwong On. He said the acquisition, if it materialised, would help Dao Heng move a step further towards fulfilling the minimum asset-size requirement to apply for a yuan business licence on the mainland. However, this was not the most important consideration for Dao Heng in making acquisitions. Mr Kwek said Dao Heng had not made provisions for its exposure to the collapsed Guangdong International Trust and Investment Corp. The exposure amounted to 'tens of millions' of Hong Kong dollars, mainly in indirect unsecured trade finance through a trading company. Mr Kwek said he believed the offer by shareholder Hong Leong Group to acquire parent Guoco Group shares it did not already own demonstrated the Malaysia-based group's commitment to Hong Kong. He declined to reveal further details about the general offer, saying only that Hong Leong's investment in Guoco had been in place for a long time and the group was satisfied with the investment.