TOKYO – DBS Group Holdings, South-east Asia’s largest bank, will increase investment and hiring in China’s Greater Bay Area as it expects growth in the region to outpace the rest of the country, according to the lender’s head of North Asia.
“There’s no reason not to be optimistic about the future and the long-term prospects of China,” Mr Sebastian Paredes, who is also the chief executive of DBS Bank in Hong Kong, said on Bloomberg TV on Wednesday.
Mr Paredes said he viewed the China operations holistically, and it would have a positive effect on the rest of DBS’ businesses around Asia. Business from Chinese clients at the bank’s Hong Kong and Singapore operations have seen double-digit growth in the last few years, he said.
DBS has been keen to expand in Greater China. Earlier this year, it signalled its interest to raise its 13 per cent holdings in Shenzhen Rural Commercial Bank in China. The bank will also complete its acquisition of Citigroup’s consumer banking business in Taiwan in August.
The diversification comes as the lender seeks more growth in places outside its home market. Hong Kong is DBS’s second-largest revenue generator after Singapore, and contributed to about 16 per cent of its total income in the first half.
Despite recent headwinds in China’s economy, Mr Paredes said the expected 5 per cent and 4.5 per cent growth in China’s economy this year and next provides almost US$1 trillion (S$1.35 trillion) of incremental growth. He pointed to electric vehicles and batteries, and semiconductors as opportunities in the country.
DBS recently reported second-quarter profit that topped estimates as net profit soared 48 per cent to $2.7 billion, fuelled by higher lending margins while fees also expanded.
Image by: Bloomberg
