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HSBC is likely to be a keen bidder for a full-banking licence in Singapore if the licensing conditions are acceptable, according to general manager, Raymond Or Ching-fai.

'A full licence would give us a very good competitive advantage,' said Mr Or. 'There is not much I can comment on about Singapore. But obviously I think our group would be keen to submit an application.

'I do not think the licence would allow immediate expansion but it would give the bank some flexibility in managing its business.'

Mr Or's comments come just days ahead of the disclosure expected from the Monetary Authority of Singapore (MAS) on the terms under which it will grant additional banking licences.

Details are expected next week, and analysts believed the second round of licences were likely to include additional privileges that would further expose Singapore players to foreign competition.

To date, the liberalisation of the Singapore banking sector had fallen short of expectations, according to some bankers in Hong Kong, and was in contrast to the hands-free attitude displayed by the SAR's banking regulator, the Hong Kong Monetary Authority.

During the takeover of Dao Heng Bank in Hong Kong by Singapore-based DBS Bank in April, for instance, the HKMA had played no role, they said.

This prompted HSBC chairman David Eldon to appeal for a similar hands-off treatment by the MAS when it came to Hong Kong rivals entering its market.

'If banks from Singapore are going to come into Hong Kong and be able to take control of a bank here, I would hope it [the MAS] would open up the market for banks in Hong Kong who may wish to go into Singapore,' Mr Eldon said.

DBS, meanwhile, has upped the ante in its aggressive campaign to become a dominant regional player, with the announcement on Friday last week that it planned to take over fellow Singapore Big-Four bank Overseas Union Bank (OUB).

The DBS offer, which consists of 0.61 DBS Holdings shares and S$1.14 (about HK$4.88) in cash for every OUB share tendered, values OUB at S$9.50 per share for a total of S$9.4 billion or about 1.83 times its December 31, 2000 book value.

DBS chairman S. Dhanabalan, said after the acquisition of OUB and Dao Heng, the bank would have increased its asset base from less than US$40 billion at the end of 1997 to more than US$100 billion.

'This will make us the third largest bank in Asia, outside of Japan, and the only Asian bank with a significant presence in Singapore and Hong Kong,' he said.

The DBS bid follows on a failed attempt by BNP Paribas, France's largest listed bank, to buy a substantial stake in OUB, which BNP said had failed because of regulatory obstacles. This was denied by the MAS.



HSBC pushes for full licence in Singapore