(Bloomberg) -- Oversea-Chinese Banking Corp.’s high capital levels may give Southeast Asia’s second-largest lender as much as S$7 billion ($5.2 billion) in excess funds that could be used for acquisitions, according to Bloomberg Intelligence analyst Rena Kwok.

Singapore-based OCBC has between S$5 billion and S$7 billion in potential dry power assuming the bank maintains its common equity tier one buffer in the range of 12.5%-13.5%, Kwok said Thursday in a reply to questions from Bloomberg News. She derived the number from the bank’s third-quarter numbers.

Singapore banks are on an acquisition spree, given their strong capital base and strategies to derive more earnings outside the city-state of 5.4 million people. OCBC Chief Executive Officer Helen Wong hasn’t unveiled her ambitions on deals since taking the helm last April. Her two main rivals DBS Group Holdings Ltd. and United Overseas Bank Ltd. are adding assets across Asia.

“OCBC’s most conservative payout ratio and highest CET1 ratio versus peers could give it an edge in expanding via M&A,” Kwok said in a separate report published Thursday. The bank also has the lowest risk profile based on the ratio to total assets among the three local lenders, she said.

UOB last week agreed to buy Citigroup Inc.’s consumer assets in four Southeast Asian countries for S$4.9 billion, using its excess capital. DBS, the region’s largest bank, is the preferred bidder for the U.S. bank’s retail operations in Taiwan that could fetch around $2 billion, according to a report. DBS also made purchases in India and China in the past 15 months without raising extra funds.

OCBC will likely hold a higher capital buffer than DBS and UOB as it conserves cash given its lower dividends received from associate companies and investments, Kwok said.

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