Transfer of state assets at nominal prices enabled Temasek to achieve high historical returns



Temasek’s high return claims may be factual.  This is because it has paid for state assets from the PAP government at nominal prices.

On such asset transferred to Temasek was Post Office Savings Bank (POSB). POSB became a statutory board in 1971.  Public resources in the hundreds of millions or billions must have been used in its expansion over more than 2 decades before PAP decided that it was time for profits to go into Temasek’s pocket.

1976 – One million depositors, deposits crossed $1 billion mark.
1986 – Deposits crossed $10 billion mark.
1998 – Transferred to DBS at only $1.6 billion

According to MOF, DBS paid 1.37 times NTA for POSB, valuing the pow chiak bank at only $1.6 billion.

Considering “POSBank’s savings account base covers about 95% of all adult Singaporeans, as well as many students and children”, isn’t $1.6 billion a lelong price?

According to an earlier POSB annual report (see table below), total deposit had already hit $20 billion in 1993 and the number of savings accounts was higher than Singapore’s total population of 3.3 million.

Even aliens were opening savings accounts at POSB in 1993

As a stat board, POSB was generating surpluses every year. A few years earlier, its annual surpluses had even exceeded $200 million.**

A price tag of $1.6 billion meant DBS could have recoup the entire investment in probably 5 years due to POSB’s consistent expansion.  POSB was as good as a giveaway.

With about $30 billion in deposits, POSB could not have been worth only $1.6 billion.  If DBS were profitable every year, had $30 billion in deposits and an established network, would it price itself at $1.6 billion in a merger?

The government was in such a rush to transfer ‘pow chiak’ POSB at below market value to Temasek and even broke the law when it did not inform the President. (Many have speculated that DBS was overexposed during the AFC.  By taking over POSB, DBS would have immediate access to an additional $30 billion in deposits.)

Unreserved President Ong Teng Cheong:

The lelong sale of POSB – just one of many stat boards – has enabled Temasek to achieve impossibly-high returns.

(CAAS – worth tens of billion$ was transferred to Temasek at only $3.3 billion. (Leong Sze Hian)  And weren’t the 3 power generation plants which Temasek sold for about $12 billion also transferred during another Great Singapore Sale?  What about Singapore Airlines, Singapore Power, PSA, Singtel, etc?)

Without the transfer of state assets at ridiculously-low prices, Temasek could not have achieved double-digit, long-term returns.

It is precisely to conceal this fact that transparency will never see daylight at Temasek.  Or Singaporeans would discover that its stratospheric returns are all BS.  ????

What do you think?

This article was first published on likedatosocanmeh. We thank the author for letting us republish here. 


  1. It’s not a surprise. Temasek makes it’s money from Singapore. Everywhere else they’ve had dismal returns. HC must possibly be the worst financial manager ever running a SWF. Without POSB being transferred to DBS, DBS would have collapsed during the financial crisis.

  2. Robbing Peter to pay Paul? POSB originated from Singapore Post Office which beside selling stamps, kept “saving accounts” for individuals. I was told it late 1970s Singapore Post Office (SPO) offered home renovation loans. Where did the funding come from? NTUC Comfort had more than $20 Million in cash and they need to find a way to have such BIG BIG sum of money create more money. This did not know what the hell to do with the more than $20million and growing. So it was a new business for SPO. So this commercial part of SPO was taken over by DBS under the name of POSB. As I was told than NTUC and its organisation had loads of CA$H which runs into $$$$$$$$$, they have to find a way how to best use it. So they started Fairprice (which I think to do is no longer really fairprice which was their original mission) Splash on their water park at Downtown East @ Pasir Ris, The monies got them VICOM and followed by income, and now educational institutions. I hope someone can check out this story that was handed to me. I am quite certain is very true but would really like to have someone who have been connected with the organisation at managerial level to tell the who story. One thing is for sure NTUC and its organisation is very very loaded with $$$$$$$. Just at the number of times the downtown east have been pulled down and something new put up. It happens almost once every 5 years. It is just money bulldosed and demolished and spent on not upgrading but something new.

  3. This article is a joke. Posb may have been transferred cheaply to DBS but this article doesn’t prove it. 30 billion in deposits is debt from DBS point of view and cannot be used to prove any valuation. The mention of 1.3 price to book is slightly better. DBS price to book in the current hot stock market is 1.5. Which even if you don’t take into account the difference in “book” value calculation, scarcely merits a “ridiculously low price” comment. Indeed the likely “culprit” of good temasek returns is the simple fact of Singapore’s economy consistently growing, pulling valuations along with it. Arguing about temaseks good returns is about arguing how much of its returns is due to its own management and how much is due to the economy (which arguably the govt is responsible for).

    I promised myself to not respond to the typical independent troll, but I just happen to have too much time at the moment (damn!).