Singapore's largest bank M&A deals through the years

OCBC has launched the biggest takeover of a Hong Kong bank in history, offering $6.23 billion in cash for family-run Wing Hang Bank. -- ST FILE PHOTO: KUA CHEE SIONG
OCBC has launched the biggest takeover of a Hong Kong bank in history, offering $6.23 billion in cash for family-run Wing Hang Bank. -- ST FILE PHOTO: KUA CHEE SIONG

If the OCBC takeover bid for Hong Kong’s Wing Hang Bank succeeds, it will be the latest in a series of game-changing deals that Singapore banks have undertaken over the years. Here is a look at the largest mergers and acquisitions in Singapore’s banking sector through history:

2014: OCBC and Wing HangOCBC announced on April 1 that it was offering $6.23 billion for Hong Kong’s Wing Hang Bank as it sought a deeper penetration into the Greater China market.

If the acquisition is successful, Greater China will contribute 16 per cent to OCBC’s profit before tax, up from 6 per cent today. Wing Hang’s expertise in small- and medium-sized enterprise (SME) banking in the region will complement OCBC China’s focus on corporate banking and should increase overall asset yield, the bank said.

As Hong Kong is a leading North Asia hub for wealth management, Wing Hang also presents OCBC with significant opportunities in private banking for Bank of Singapore.

2009: OCBC and ING In the wake of the 2008 global financial crisis, several European and American lenders required massive bailouts from their governments, while others began selling off parts of their business in a bid to cut costs and stay afloat.

One such buying opportunity turned up when Dutch bank ING decided to sell its Asian private banking arm, a highly-coveted business. OCBC eventually emerged the winner with a $2.03 billion deal.

2001: UOB and OUBThe $10 billion takeover of Overseas Union Bank in 2001 was the culmination of a months-long tussle between rival bidders UOB and DBS.

UOB won in the end, as its bid was seen as a friendlier one than DBS’ and its offer included a higher cash portion than DBS’. The deal propelled UOB to become the biggest bank in Singapore at the time.

The tug-of-war was marred by controversy, including a public apology and a $2 million payment from DBS for defamatory statements made against UOB and OUB in a document distributed to European investors.

2001: OCBC and Keppel Tat LeeHot on the heels of the UOB-OUB merger, OCBC paid $5.21 billion for Keppel Tat Lee Bank, which itself was the product of an earlier merger between Keppel Bank and Tat Lee Bank.

2001: DBS and Dao HengDBS bought Hong Kong’s Dao Heng Bank for $10 billion in order to catapult itself into a regional powerhouse – and paid dearly for this gamble. The deal remains among the biggest-ever takeovers of a Hong Kong bank.

However, DBS’ plans for expansion in Hong Kong were frustrated by slow economic growth in the city. Over the years, DBS has had to take at least $2 billion in writedowns on the acquisition.

1998: DBS and POSBank In 1998, the Government decided to privatise the Post Office Savings Bank, or POSBank, and accepted a $1.6 billion offer by DBS to acquire it.

The move was in line with the Government’s policy then of encouraging local banks to merge and consolidate their operations in order to develop into sizeable banks to compete internationally.

DBS was identified as the most suitable partner for POSBank, as it was already the largest local bank, with a substantial government shareholding.