DBS

DBS: More uncertainty ahead with market sources noting that DBS may not settle for the minority stake it has been offered in Indonesia's Bank Danamon. Bank hopes that talks between the central banks of Indonesia and Singapore will clear the way for a majority takeover. Pending these, it may ask for an extension from seller Temasek Holdings. Hopes are now pinned on the talks between MAS and BI on extending reciprocity for Indonesian banks to allow a majority stake sale. It is likely that the country’s largest bank, PT Bank Mandiri, which currently only has an offshore banking status in Singapore will be granted broader access to the Singapore market. Although some analysts questions the interests of Indonesian banks to expand their presence in Singapore, citing that Indonesian banks' ROE lies in the 18 to 20% range vs Singapore banks at 10+%.