SHANGHAI: Singapore-based DBS Group Holdings Ltd said yesterday that it has started preparatory work for issuing yuan-denominated bonds in China and would communicate with regulators and investors in due time.
"Yuan bonds are new products and we're actively considering whether to launch them this year," said Melvin Teo, director and chief executive officer (designate) of DBS Bank (China) Ltd in Shanghai.
DBS is also actively looking for sources of funding in China, and will take a close look at the progress of yuan bonds, said Koh Boon Hwee, chairman of DBS Group.
Overseas banks are eyeing the yuan-denominated bond market in the country to quench their capital thirst and support the aggressive business expansion plans .
Japanese lender Bank of Tokyo-Mitsubishi UFJ (China) has already got approval from the China Banking Regulatory Commission to launch yuan bonds in the inter-bank bond market. The proposal, however, still needs to be approved by the People's Bank of China, the central bank.
Other overseas banks like HSBC, Bank of East Asia, and Standard Chartered are also in the process of seeking licenses for yuan bonds in China, according to China Business News reports.
The Shanghai municipal government said recently it would encourage all locally incorporated banks to issue yuan-denominated bonds.
DBS China's customer base in China has grown nearly fourfold in the last three years, and doubled its workforce to over 1,000. The lender currently has eight branches and seven sub-branches in China in Shanghai, Beijing, Shenzhen, and Guangzhou.
"We plan to expand our branch strength in the country over the next five years," said Piyush Gupta, CEO of DBS Group, adding that the lender would increase its investments in China at an appropriate time.
DBS also has no plans to issue credit cards in China this year and would instead focus on corporate banking, said Gupta.
The largest lender in Southeast Asia set up its new China headquarters in Shanghai's Lujiazui financial district yesterday.
