Basel III capital charges to dent bank M&A activity
Holding minority stakes in other banks is capitally onerous under Basel III but with a majority of states in the region capping foreign ownership, mergers and acquisitions across Asia are facing serious hurdles
Strong economic fundamentals and an expanding middle class among South-east Asia has made banks in the region tempting targets for growth-hungry players from both the surrounding region and Japan. But as Singapore bank DBS's recent failed bid for Indonesian lender Danamon proved, overcoming local restrictions on foreign ownership is not the only problem to face. Governments around the region peg international firm's holdings of non-local banks as low as 15% but the economic case against
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