Whether the deal can go through "all depends on the negotiations between the central banks, " Jonathan Koh, an analyst at brokerage UOB Kay Hian said.

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Last year SIAS also drew attention to an initial public offering in which the local United Overseas Bank (UOB) applied for shares underwritten by one of its own units.

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"OCBC can absorb an NPL rate of 19.6% without impairing its book value, " says Salomon banking analyst John Doyle, who also favors UOB, which boasts the lowest NPL rate - 5.1% - among the Big Four.

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