What will DBS use the money for?

With the news of DBSÆs fresh capital-raising exercise, rumours have re-emerged of a possible tie-up with AustraliaÆs Westpac.

Given DBSs extraordinary capital-cushion, observers feel confident a big acquisition is being planned, and Westpac which trades on a price to book of 2.7 times and has a market cap of $13 billion is regarded as the best possible contender.

Westpac derives 93% of its earnings from Australia, while DBS still makes almost all of its money in Singapore. However, the Singapore government, which owns 39.7% of DBS, has been pushing the bank to emulate HSBC and...

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