Overseas Trust Bank - AbsoluteAstronomy.com

Overseas Trust Bank Limited (OTB) was a bank

Bank

A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...

in Hong Kong

Hong Kong

Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

. It was established in 1955 by Chang Ming Thien, a Malaysian businessman and it was listed on the Hong Kong Stock Exchange

Hong Kong Stock Exchange

The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...

in 1972. It was the fourth largest bank in Hong Kong before acquisition

Takeover

In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...

Collapse and takeover by Government

On June 6, 1985, OTB suddenly announced that it was on the brink of collapse, due to its severe cash flow

Cash flow

Cash flow is the movement of money into or out of a business, project, or financial product. It is usually measured during a specified, finite period of time. Measurement of cash flow can be used for calculating other parameters that give information on a company's value and situation.Cash flow...

and bad debt

Bad debt

A bad debt is an amount that is written off by the business as a loss to the business and classified as an expense because the debt owed to the business is unable to be collected, and all reasonable efforts have been exhausted to collect the amount owed...

problems. Bad debts held by the bank reached US$89.5 million. To recover the confidence of the public and investors of the Hong Kong banking system, the Hong Kong Government stepped in and took over OTB in the following day. From 1985 to 1986, the government ordered the Royal Hong Kong Police and ICAC

ICAC

ICAC may refer to:*Independent Commission Against Corruption**Independent Commission Against Corruption **Independent Commission Against Corruption *Indiana Collegiate Athletic Conference...

to investigate the causes of OTB downfall. In May 1986, the former chairman of OTB, Patrick C.T. Chang, was arrested at the Hong Kong International Airport reportedly with a large amount of cash and jewellery. In 1987, Chang and OTB's former senior management were sentenced to jail by Hong Kong Law Court.

Sold to Guoco

In 1993, the government sold OTB to Malaysian-owned Guoco Group

Guoco Group

Guoco Group Limited is an investment holding company. The principal activities of its subsidiaries and associated companies include investment and treasury management, property development and investment, stock and commodity broking, insurance, investment advisory, fund management as well as...

for US$571 million. OTB became the subsidiary

Subsidiary

A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...

of Dao Heng Bank

Dao Heng Bank

Dao Heng Bank Group Limited was a bank in Hong Kong and it had two subsidiaries before acquisition, Dao Heng Bank Limited and Overseas Trust Bank Limited....

Sold to and merged with DBS Bank

In 2001, Singaporean

Singapore

Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...

DBS Bank

DBS Bank Ltd is a bank incorporated in Singapore. It was previously known as The Development Bank of Singapore Limited, before the present name was adopted in July 2003 to reflect its changing role as a regional bank....

acquired and privatized Dao Heng Bank, together with OTB, from Guoco Group. In 2003, DBS Bank merged DBS Kwong On Bank, Dao Heng Bank and Overseas Trust Bank to form DBS Bank (Hong Kong) Limited.

Collapse and takeover by Government

Sold to Guoco

Sold to and merged with DBS Bank

See also