DBS Group Holdings, Southeast Asia’s biggest bank, said it will take over Royal Bank of Scotland Group Plc’s retail and commercial banking businesses in China.

RBS will transfer close to 25,000 clients in Shanghai, Beijing and Shenzhen to DBS China, Singapore-based DBS said in a statement today. DBS didn’t spend any money on the deal, Melvin Teo, chief executive officer of DBS China, said at a news conference in Shanghai.

DBS Chief Executive Officer Piyush Gupta, seeking to lift a stock that’s trailed rivals in 2010, said last month he plans to improve return on equity by building businesses that cater to wealthy individuals and small companies, and by expanding in China, India and Indonesia. For RBS, the deal is part of asset disposals following a government bailout and record losses.

“There’s a bit of momentum there for selling fringe assets,” said Mike Trippitt, a London-based analyst at Oriel Securities who has a “buy” rating on RBS. The deal “is good in terms of sentiment,” he said.

Singapore-based DBS aims to generate about 40% of revenue from the city state in five years, down from about two- thirds now, according to a plan unveiled in February. Greater China would make up 30%, DBS has said. South Asia and the rest of Southeast Asia may contribute another 30%.

The transaction with RBS, if all accounts choose to move, will add US$900 million ($1.18 billion) of deposits to DBS China and lower its loan-to-deposit ratio to about 70% from the current 79%, Teo said. He said RBS wanted to exit the retail and commercial banking businesses so DBS took them over for free.