(Yicai Global) April 21 -- DBS Group, Singapore’s biggest commercial lender, will pay CNY5.29 billion (USD813 million) to become the single-largest shareholder in a private Chinese bank based in the city of Shenzhen.

The acquisition of a 13 percent stake in Shenzhen Rural Commercial Bank has been approved by the China Banking and Insurance Regulatory Commission, DBS said in a statement yesterday. It plans to buy 1.35 billion new shares priced at CNY3.91 (60 US cents) each.

The deal marks the first time a small to mid-sized Chinese bank has welcomed an overseas investor in more than a decade. Hana Bank of South Korea paid CNY2.16 billion for 18 percent of Bank of Jilin in 2010.

Shenzhen Rural Commercial plans to offer about 1.96 billion new shares to four investors -- DBS, Shenzhen Huaide Joint-Stock Company, Shenzhen Huaqiang Asset Management and Runyang Group -- to raise about CNY7.6 billion (USD1.2 billion), according to a Securities Times report. 

The bank had net profit of CNY3.3 billion in the nine months through September on revenue of CNY8 billion. Its bad loans ratio reached 1.4 percent at the end of the same period, with provision coverage at 257.54 percent and a capital adequacy ratio of 13.91 percent.

The deal, which will see DBS take seats on Shenzhen Rural Commercial’s board, is still subject to approval by the China Securities Regulatory Commission.

Editor: Tom Litting