Will DBS reign with Taiwanese merger in the pipes?



Singapore's stocks rose on the first trading day of the week. DBS Group Holdings climbed after Taiwan's Far Eastern International Bank said it has been in talks with Singapore's biggest lender.Far Eastern International Bank, a Taiwanese lender, said it seeks a "strategic alliance" with a "world-class" financial company, and that it's been in talks with DBS Group.

On 16 February this year, the Taipei-based company stated in the Taiwan Stock Exchange that although discussions with DBS have been taking place for the past two to three years, "no conclusion has been reached," "It's our policy not to comment on market speculation or M&A activity,"Jenny Lee, DBS spokeswoman said in a phone interview.

As it is, recent buck ups from foreign banks like Citibank's expansion shows that these "outsiders"are prepared to slug it out for retail banking supremacy in Singapore. DBS is also expected to see fairly fierce competition from close rival, UOB. UOB is expected to see a recovery in its domestic loan book as the operating environment improves and plans to step up its loan expansion to capitalize on better spreads and secular growth amidst reflation. UBS analysts forecast UOB's earnings to grow at 12 percent this year.

With "rivals"gunning for supremacy from all sides, will DBS be able to retain its stature as Singapore's top performing local bank?