British bank Barclays raised its bid for Dutch group ABN Amro to €67.5 billion (US$93 billion) on Monday, helped by some of the biggest ever overseas investments by China and Singapore.

China Development Bank (CDB), whose main function is to make loans in support of Chinese government policies, and Singapore state investor Temasek agreed to invest up to €13.4 billion in Barclays to aid its fight for ABN.

Barclays said its new bid for ABN included €24.8 billion in cash and was up from its previous all-stock offer of €65 billion.

The offer is still below a rival €71 billion bid from a group of European banks led by Royal Bank of Scotland (RBS), but Barclays said it expects the value of its offer to rise and indicated it has no plans to sweeten its offer further.

"We've put an enticing cream cake on the table for ABN shareholders; we are not going to top it up with cream," John Varley, Barclays chief executive, said at a press conference.

"We feel no need to do anything further."

A deal with either Barclays or the RBS team, which includes Spain's Santander and Belgian-Dutch group Fortis, would be the biggest ever bank takeover.

Playing a shrewd game

Analysts and investors said Barclays was playing a shrewd game, signalling it would not engage in a destructive bidding war and also boosting its shares to help win the day.

"Royal Bank of Scotland is still the favourite, but the odds are a little bit different to what they were on Friday," said Colin Morton at Rensburg Fund Management, a holder of both Barclays and RBS stock.

Barclays, Britain's third-biggest bank, said its new offer had not been recommended by ABN, but Varley said he hoped and expected that it would be.

The offer is conditional on being recommended by ABN's boards, but Varley declined to comment on whether he would withdraw if it doesn't get their backing.

An initial investment by CDB and Temasek of €3.6 billion will be used by Barclays to buy back shares during the takeover process, which analysts said would help underpin its share price.

The remainder of the investment, almost €10 billion, will be made if Barclays wins ABN.

CDB will take a 3.1 per cent stake in Barclays, potentially rising to 8 per cent of an enlarged Barclays, while Temasek will take a 2.1 per cent stake in Barclays, potentially rising to just over 3 per cent.

CDB's stake would be the biggest overseas investment by China and Varley said he was "entirely comfortable" with it becoming the biggest shareholder.

CDB is one of the country's three lenders driven by a strategy to support government policy.

Flush with US$1.33 trillion in foreign exchange reserves, China has made no secret ofits intention to diversify its portfolio of foreign holdings, which is currently concentrated in government assets.

- Reuters