Date
12 December 2017
DBS Bank (Hong Kong) chief executive Sebastian Paredes believes a large-scale capital outflow from Hong Kong is highly unlikely, given the interest premium in the city. Photo: HKEJ
DBS Bank (Hong Kong) chief executive Sebastian Paredes believes a large-scale capital outflow from Hong Kong is highly unlikely, given the interest premium in the city. Photo: HKEJ

DBS Hong Kong eyes more private banking acquisitions

DBS Bank (Hong Kong) Ltd. may tap into more merger and acquisition opportunities in the region, the Hong Kong Economic Journal reported Monday, citing chief executive Sebastian Paredes in an interview.

The Singaporean lender acquired the Asian private banking unit and part of the custodian business of Societe Generale Singapore and Hong Kong in March for US$220 million.

As long as the opportunity aligns with the group’s positioning, product and client strategies, the bank will consider it, Paredes said when asked whether DBS is interested in acquiring Coutts & Co., the private banking arm of the Royal Bank of Scotland, which is reportedly up for sale.

The lender is eyeing a bigger share of the wealth management market, and the purchase could help further develop the business. 

Paredes expects interest rates in Hong Kong to rise alongside an increase in the fed funds rate of the United States as the country enters a new rate-hike cycle, possibly in the fourth quarter of next year.

Yet given the interest premium in the city and the long-entrenched expectation of a rate hike in the US, a large-scale capital outflow from Hong Kong is highly unlikely, Paredes said.

Meanwhile, Paredes forecasts a single-digit growth in the bank’s lending next year, with trade financing demand seen declining amid a downtrend in commodities prices and China’s slowing economy.

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VW/JP/CG

Freelance journalist

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