DBS said the directive by MAS affected only 12 current investments. Of the 12, only three were listed counters, with a total market value of S$170 million as of the close of market on Jun 20. The three listed firms affected are NatSteel, Intraco, and CWT Distribution, in which DBS has shareholdings of between 13-15%.
The remaining nine investments in businesses or activities now classified by MAS as 'non-permitted' represent a range of businesses primarily involved in shipping, resort development and management, and technology, with net tangible asset value totalling S$65 million.
According to the Bank, as most of the investments have been held for more than ten years, gains would likely be treated as capital gains and therefore would not be taxable. The tax impact of the required divestitures is therefore not expected to be material.
In regard to the revised guidelines for property investment and development, DBS said it is largely uninvolved in the Singapore investment property or property development sector with most of its holdings in DBS Land having been sold to Pidemco Land on Feb 21 of this year. DBS Group's stake in DBS Land is currently 5.4%. DBS' holding of investment properties, including those held by subsidiaries and affiliates, is within the newly revised limit of 20% of capital funds.
Bank officials said sales required to comply with the new regulations would be carried out in a systematic and orderly fashion to avoid adverse market impacts, noting that MAS has allowed a period of up to three years to complete divestiture.
Since 1999, DBS has divested a number of non-core assets, including DBS Tampines Centre building and POSBank Centre building, as well as stakes in DBS Land and Singapore Petroleum Company.
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About DBS DBS Bank is the flagship bank of DBS Group Holdings in Singapore. It is ranked among the top banks in Asia, the 70th largest in the world, a recognised leader in Internet banking and e-commerce and the market leader in Singapore-dollar loans and deposits, and equity fund raising. Beyond Singapore, DBS Group serves corporate, institutional and retail customers through subsidiaries in Hong Kong, The Philippines, Indonesia and Thailand, and international banking services through a network of 13 overseas branches and offices.
