In Focus
RETAIL BANKING | Staff Reporter, Singapore

Singapore banks selling non-core investments to prepare for Basel III

OCBC sold F&N and APB while DBS sold its stake in BPI.

Barclays notes that in recent months, the SingaDpore banks have disposed of various non-core investments, including:

  • OCBC announced disposal of non-core assets in July: two beverage makers, Fraser and Neave (FNN SP) and Asia Pacific Breweries (APB SP), for a total consideration of S$3.2bn. It plans to recognise a gain of S$1.1bn, likely in 4Q12E.
  • DBS partially divested of its stake in Bank of the Philippine Islands (BPI), reducing its ownership from 20.3% to 9.9% for a total consideration of S$757.3mn. It will recognise a gain of S$450mn, likely to be booked in 4Q12E.

Here's more from Barclays:

We would not be surprised if there are further disposals of non-core investments as the banks shore up their capital positions in preparation for Basel III.

Changes to the treatment of minority interests and investments in financial institutions under Basel III may encourage banks to exit certain investments in order to optimise capital calculations.

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