Singapore-based DBS Group has announced its S$4.1 billion rights issue was oversubscribed by 118.8%.

It reported valid acceptances and excess applications were received for a total of 903.5 million rights shares - representing approximately 118.8% of the total number of shares being offered.

It said close to 27,500 acceptances and excess applications have been received, including Temasek - the majority shareholder in DBS - which has taken up its full rights entitlement of 27.6%.

Announcing the launch in December, DBS said the issue would give it a stronger capital position and provide it with a "competitive advantage to strengthen existing customer relationships, seek out new customers, and selectively grow its loan book to increase market share and profitability."

It said organic growth remained a priority and denied the capital raising was intended for any merger and acquisition activity or extraordinary provisions. Speaking at the time, Richard Stanley chief executive of DBS, said: "DBS is initiating this capital-raising exercise from a position of strength. Our business continues to perform well despite the challenges of the global economic downturn.

"We have a robust balance sheet characterised by strong liquidity, capital adequacy ratios and asset quality. The rights issue will enable DBS to capture opportunities to entrench our market position in key Asian markets and confidently weather the economic uncertainties ahead."

Its capital position remains strong, with capital ratios well above the minimum regulatory requirements. As of 30 September 2008, the consolidated core Tier 1 and Tier 1 ratios of the Group were 7.8% and 9.7%, respectively, while the total capital ratio was 13.4%.

Since the confirmation of the size of the rights issue, DBS issued a statement on 29 January to say its chief executive Stanley has been diagnosed with leukemia and will commence medical treatment in Singapore immediately.

The Bank said medical diagnosis confirmed that his form of leukemia was treatable and full remission is possible. Stanley is expected to take a leave of absence from the bank of about three to six months as he undergoes medical treatment.

While Stanley is away from work, with immediate effect, Chairman Koh Boon Hwee will work closely with the Management Committee and assume an active management oversight role. Koh is not new to this role as he previously acted in a similar capacity, having taken on an active management oversight role at DBS from September 2007 to April 2008, prior to Stanley's appointment as chief executive.

Full disclosure of the latest turn of events has been made to the underwriters of the rights issue (Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley and UBS).
Koh said: "The Board and management are shocked by the sudden news of Richard's medical condition. My colleagues and I look forward to the day when his condition is in remission and he returns to work at DBS. Our thoughts are with Richard and his family and we wish him a speedy recovery.

"The strategic directions set by the Board remain in place and we have a strong leadership team to take the bank forward. Despite the challenging economic outlook, all of us at DBS are determined to walk alongside our customers, employees and investors."