Why do foreign banks expand in China despite weakening profitability?
Although foreign banks in China have been falling further behind domestic lenders in key profitability metrics over the past two years, the growth potential in wealth management and cross-border financing in the world’s second-largest economy might explain why they stay or even expand.
While net interest margins are trending lower for most banks in China amid Beijing’s accommodative monetary policies, foreign lenders have seen their returns on lending and other interest-earning assets fall more sharply than domestic institutions. As of March 31, the gap between the NIMs of foreign banks and the nation’s six largest state-backed commercial banks, for instance, widened to 47 basis points from 26 bps two years ago, according to the China Banking and Insurance Regulatory Commission, or CBIRC.
Foreign investors line up for China financial services play By JIANG XUEQING | China Daily | Updated: 2021-05-06 09:03 Share
DBS stake in Shenzhen rural bank signals rising confidence in new round of opening-up
Foreign financial institutions, or FFIs, are planning to increase investment in China s commercial banks or exploring new business opportunities in the country, as China has strengthened efforts to further open up its financial sector, industry experts said.
Singapore s DBS Group announced recently its subsidiary DBS Bank has received Singaporean and Chinese regulatory approvals to acquire a 13 percent stake in Shenzhen Rural Commercial Bank with 5.29 billion yuan ($815 million).
DBS Bank, a multinational banking and financial services corporation, will use funds owned by the bank to buy 1.35 billion new shares of Shenzhen Rural Commercial Bank, abbreviated as SZRCB, at a price of 3.91 yuan per share.
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4 May, 2021 Author Rebecca Isjwara
DBS Group Holdings Ltd. may stay on the hunt for more acquisitions to fuel growth as its small, though high-value, home market of Singapore poses limits on its ambitions of becoming a leading Asian bank, analysts say.
DBS, Southeast Asia s biggest bank by assets, has recently made substantial investments in the large and upcoming markets of Asia, including China and India. It announced on April 20 that it will acquire a 13% stake in Shenzhen Rural Commercial Bank, making it the largest shareholder of the Chinese lender. In November 2020, DBS acquired ailing Indian lender Lakshmi Vilas Bank Ltd.
Singapore s DBS Bank report record Q1 profits as LVB s NPA shrink ANI | Updated: May 03, 2021 21:44 IST
By Lee Kah Whye
Singapore, May 3 (ANI): DBS Bank, Southeast Asia s largest bank by assets, reported its highest-ever quarterly profit aided in part by lower NPA (non-performing assets) provided for Lakshmi Villas Bank (LVB) which DBS acquired in November last year.
Singapore headquartered DBS Group s first-quarter 2021 net profit nearly doubled from the previous quarter and increased 72 percent from a year ago to SGD2.01 billion (USD 1.51 billion). It is the first time quarterly earnings has exceeded SGD2 billion.
Total revenue for the first three months of the year came in at SGD3.85 billion which is 18 percent higher compared with Q4-2020 but a four percent decline from a year ago. The bank noted that this would have grown nine percent had Net Interest Margin (NIM) been stable. Expenses rose two percent to SGD1.59 billion mostly due to
DBS Bank, Southeast Asia largest bank by assets, reported its highest-ever quarterly profit aided in part by lower NPA (non-performing assets) provided for La