DBS Group announced a further increase in its stake in Shenzhen Rural Commercial Bank (SRCB), taking its holding to 19.90% from 19.40% following a fresh share purchase.
DBS Bank, a unit of DBS Group, bought 52.2 million shares of SRCB at 5.94 yuan per share. The purchase carried a total value of 310 million yuan, equivalent to about $44.78 million based on the figures disclosed.
The latest transaction follows an initial entry into SRCB in October 2021, when DBS acquired a 13% stake. That holding was subsequently lifted to 16.69% in January 2024 prior to this most recent purchase, reflecting a gradual increase in the Singapore lender's ownership position in the Chinese rural bank.
DBS made the disclosure on the same day it released fourth-quarter financial results. Those results showed a 10% decline in profits for the quarter. The bank attributed the decrease in quarterly profits to a lower net interest margin and said it expects net profit in 2026 to be slightly lower than in 2025.
Summary
DBS has modestly increased its stake in SRCB through a 52.2 million-share acquisition valued at 310 million yuan, bringing total ownership to 19.90%. The announcement coincided with DBS reporting a 10% drop in quarterly profits, which the bank linked to margin compression and used to maintain a cautious near-term profit outlook for 2026 compared with 2025.
Key points
- DBS raised its SRCB holding to 19.90% from 19.40% via a 52.2 million-share purchase at 5.94 yuan per share, costing 310 million yuan ($44.78 million).
- This move builds on a sequence of investments that began with a 13% stake acquired in October 2021 and an increase to 16.69% in January 2024.
- The disclosure came the same day DBS reported a 10% decline in quarterly profits, which it attributed to a lower net interest margin and signaled that 2026 net profit is expected to be slightly below 2025 levels - items relevant to banking and financial markets.
Risks and uncertainties
- The bank cited a lower net interest margin as the reason for the quarterly profit decline - a direct profitability risk for DBS and the broader banking sector.
- DBS maintained an outlook that 2026 net profit will be slightly lower than 2025, introducing uncertainty around near-term earnings trajectories for the lender.
- The article does not provide detail on the strategic rationale or any commentary from SRCB or regulators, leaving the motivations and potential regulatory considerations unclear.