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Singapore's DBS closer to taking strategic stake in Chinese lender

Move is first foreign investment in small or midsize bank since 2010

DBS is betting heavily on growth in China's Greater Bay Area, which generated more than 11% of China's GDP in 2018.   © Reuters

China's securities regulator has given the go-ahead to Shenzhen Rural Commercial Bank's (SZRCB) private placement, in which Singapore's biggest bank will take a major stake, marking the first foreign strategic investment in a small or midsize Chinese bank through a private placement in more than a decade.

On June 22, the China Securities Regulatory Commission approved the Shenzhen lender's sale of about 1.96 billion new shares, it said in a statement. The lender is poised to sell 1.35 billion of the shares to DBS Bank for 5.29 billion yuan ($819 million) under a deal in which the Singaporean bank will hold a 13% stake, making it SZRCB's largest shareholder. The deal got the nod from China's banking regulator in April.

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