OCBC: Value to be unlocked II

In Banks on 26/04/2010 at 4:37 am

Sometime in March, I analysed how valuable GE Life is to OCBC based on the price that Prudential is paying for AIA. I said  (now revised post to take account of the embedded valued -EV – revealed in the just released 2009 annual report) that the value to OCBC of its GE stake (based on the AIA valuation that the Prudential is working on) is S$3.15  share or S$10.5 billion in total.

But I doubted that the value would be unlocked given that without GE Life OCBC would be only an SME bank its pretensions in private banking and investment banking notwithstanding.

But given the rumours that OCBC is on ANZ Bank’s target list, who knows except the controlling shareholder of OCBC whether value will be unlocked.

Tomorrow I will discuss why DBS should organise a consortium to takeover and dismember OCBC.

  1. […] Is GE Life fairly valued? In Uncategorized on 03/05/2010 at 4:40 am Based on friday’s closing price of $15.66,  GE Life is trading at  1.27x 2009 ‘s  Embedded Value (the sum of net assets plus the current value of future profits from existing policies) of $13.167 a share. I have argued that based on what PRU is paying for AIA, GE Life’s value should be unlocked by OCBC […]

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