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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (10302)	12/25/1999 12:00:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 12475

DBS Bank (Singapore) on the prowl in India The Straits Times (Singapore) December 18, 1999 Private UTI Bank of India confirms preliminary talks to sell a 20 per cent stake to Singapore bank ACQUISITION-HUNGRY DBS Bank, which has made forays into Thailand and the Philippines recently, is on the prowl in India. It confirmed yesterday it had held preliminary talks with UTI Bank of India for a possible stake. UTI is one of a handful of quick-stepping private banks that have emerged on the Indian banking scene in recent years and these banks have drawn the attention of foreign investors. The Indian bank said it had held talks on Thursday to sell a 20 per cent stake to DBS Group Holdings. A spokesman for DBS Bank, South-east Asia's largest bank, confirmed the talks, but told The Straits Times: "It could mean something, it could mean nothing. We see opportunities on a daily basis. "Ultimately, these things depend on a range of factors -location, size, scale and operational and cultural fit." According to Bloomberg News, UTI Bank put the idea to the Singapore party after the Indian bank's major shareholders -Unit Trust of India (UTI) and Life Insurance Corp -urged it to tie up with a foreign lender. UTI and the life insurance company also face an Indian government order to cut their combined 73 per cent stake to 40 per cent. "We've made a presentation to DBS," said Mr M.M. Agarwal, UTI Bank's general manager. The Indian bank is awaiting a response from Singapore, he said. Facing increased competition from Indian banks, UTI Bank and the shareholders aim to sell some of the lender to a foreign bank rather than an Indian bank to get access to foreign technology and expertise, he added. DBS has been picking up stakes in several overseas banks as it moves quickly to emerge as a regional player. It also has an office in India. Its most spectacular purchase was the majority stake it took in Thai Danu Bank, Thailand's 10th-largest bank. In the Philippines, DBS is working on a deal to take over JP Morgan's 12 per cent stake in Bank of the Philippine Islands. It has also taken over Kwong On Bank in Hongkong, and bought a 60 per cent interest in Manila's Bank of South-east Asia in January last year and renamed it DBS Bank Philippines. Last month, the bank formed a Regional Integration Centre to drive faster integration of DBS and its acquisitions in Hongkong, the Philippines, Thailand and Indonesia. Meanwhile, in India in recent weeks, much investor attention has centred not just on UTI but another private bank, HDFC Bank. Several US and European financial conglomerates have been picking up stakes in HDFC, which itself acquired recently another private bank, Times Bank. India's banks, mostly state-run, are notorious for poor efficiency and low computerisation levels which offer private operators immense opportunities to provide attractive banking services to the vast nation. UTI has been among Indian banks that have seen their share prices rise on speculation about possible takeovers and mergers. Its stock has risen some 50 per cent over the past three weeks. It ended yesterday at 26 rupees (S$ 1.05) after rising to its maximum one-day limit of 8 per cent set by the regulator. * Uti Bank discusses selling stake to DBS after the Indian bank's major shareholders -Unit Trust of India and Life Insurance Corp -urge the bank to tie up with a foreign lender. * UTI is one of the nimble private banks to emerge on the Indian financial scene in recent years and these banks have drawn the attention of foreign investors. * Its share price has shot up some 50 per cent over the past three weeks on rumours over a possible takeover or merger.