DBS Group folds Hong Kong assets into single brand

Singapore-based DBS Group yesterday marked the end of a five-year spending spree when it formally incorporated three Hong Kong bank acquisitions (Dao Heng, DBS Kwong On and Overseas Trust Bank) under one brand - DBS Bank (Hong Kong).

The rebranding move follows the successful passage of the Dao Heng Bank (Merger) Bill in the Legislative Council last month, which legally bonded the three banks into one entity that is symbolic of consolidation of Hong Kong's banking industry. Small, family controlled banks are disappearing from the local landscape in the face of an ever tougher operating environment that favours larger economies of scale.

Reflecting this new reality that size matters, DBS Bank (Hong Kong) chairman Frank Wong Kwong-shing said it should account for about 50 per cent of DBS Group's total profits 'as soon as possible' - up from one-third at present.

In a positive mood for the bank, Standard & Poor's yesterday revised its outlook of the new bank's long-term and foreign currency credit rating to positive from stable, saying the revision reflected 'an expectation that DBS Bank [HK] will play a significant role in helping DBS Bank group achieve its objective of expanding in Asia'.

Mr Wong said the change reflected the growing scope of DBS, which had grown from an economic development tool of the Singapore government to a full-fledged commercial lender with pan-Asian aspirations.

He added that DBS would consider a secondary listing in Hong Kong but cautioned that such a move should be only expected in the 'medium to long term'.