Singapore has identified China and India as "huge potential markets" where its banks can expand after undertaking further consolidation, the city-
state's senior statesman Lee Kuan Yew has said.
Lee, who is Singapore's Minister Mentor, said that the city state could do better with two banks instead of the current three--DBS, UOB and OCBC.
"I would have preferred personally that there be only two banks, because I don't think Singapore is big enough for three banks," Lee told the bankers at the Association of Banks in
Singapore dinner Friday night.
However, OCBC and UOB would not combine or merge or allow a takeover by DBS, the city state's biggest financial institution, he said.
Lee, the founder of modern Singapore, recalled how foreign banks were given greater freedom to operate in the city state in the 1990s so as to improve the standards of the banking industry.
The 1990s saw the consolidation of seven Singapore banks into three, said a report in The Straits Times Saturday.
On a query on bumper bonuses, Lee said that it might be possible to keep bankers' pay down and satisfy public anger for now, but "once your reach normalcy," the banks would have to compete for the best talent and pay accordingly.