Bank: Sell cheap, gain more?

Piggy bank in the hands of the doctor.Piggy bank in the hands of the doctor.

December 28, 2017

Was this the cheapest “bank sale” in the history of the world?

I refer to the article “Japan’s MUFG may succeed where DBS didn’t” (Straits Times, Dec 28).

It states that “On Tuesday, MUFG said it had agreed to buy an initial 19.9 per cent stake from Temasek Holdings and units affiliated with Singapore’s state investor.

The Japanese bank then plans to next year increase its interest to the 40 per cent foreign-investor limit, before applying to buy out all of the Temasek group’s holdings.

It seems this time, the Japanese may get lucky where the Singaporeans lucked out.”

In this connection – arguably, the real “biggie” historically – for bank ownership – may be the sale of POSBank to Temasek at a price of only $1.6 billion – without even an independent valuation or tender.

In 1998, DBS Bank bought POSBank (which had four million customers) from the Singapore Government for $1.6 billion, a 37% premium over its net tangible asset value.

A real bargain indeed!

Leong Sze Hian

 

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About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.