Southeast Asia's biggest bank, Singapore-based DBS, announced on Wednesday that it will take control of Royal Bank of Scotland (RBS) Group PLc's commercial and retail banking portfolios in China, according to the China Daily.
In accordance with the agreement signed by the two banks, Edinburgh-based RBS will transfer about 25,000 customer accounts in Shanghai, Beijing and Shenzhen to DBS, which would be subject to customer approval.
Approximately $900 million of deposits would be added to DBS if all affected customers sign on with the bank.
Melvin Teo, chief executive officer of DBS China, in Shanghai, said, "it's a transfer move for free, DBS will not pay any cash for the deal. We're confident that 70 to 80 percent of affected customers will transfer to our bank."
The transaction, anticipated to be completed within six months, would help DBS China expand rapidly its customer base in retail banking, and decrease its deposit-loan ratio to 70 percent from the current 79 percent, the Singapore-based bank disclosed.
Charles Li, country head for RBS China, said, "RBS made a strategic decision in February 2009 to focus on the wholesale banking business in the Asia-Pacific region. Our exit from the retail and commercial banking businesses in China is in line with our strategy.
RBS has been undertaking a restructuring process after obtaining funding of $71 billion U.S. dollars from the British government, following the global financial crisis.
