DBS Group (DBSM.SI), Southeast Asia’s biggest bank, said today it was seeking new sources of funding in China, including issuing yuan-denominated bonds, to support expansion in the world’s third-largest economy.

“We’re keenly considering issuing yuan-denominated bonds in China this year and have been making preparations,” DBS Bank’s China President Teo Tzai Win told a news conference in Shanghai. “We will communicate with regulators and investors in due time.”

DBS, which operates in eight Chinese cities, aims to expand business to a dozen cities in the next five years, pending regulatory approval, DBS Group Executive President Piyush Gupta said at the same event.

DBS, the sixth-biggest foreign lender in China, competes with bigger rivals such as HSBC Holdings Plc (HSBA.L)(0005.HK) and Standard Chartered Bank (STAN.L) (2888.HK), which are both preparing to issue yuan bonds in China.

DBS Chairman Koh Boon Hwee said on Jan 19 that the lender, which hires more than 1,000 employees in China, would grow its staff in the country by several hundred this year, and expand China outlets aggressively.

Koh said today that the group had no plans to list its China banking unit in Shanghai, even as China was expected to allow domestic listings of foreign companies this year.

DBS will report its 2009 earnings on Feb 5 and is expected to turn in a profit of $503 million in the fourth quarter, according to a mean forecast of analysts on Thomson Reuters, up 70% from a year ago.