The Australia and New Zealand Banking Group (ANZ) yesterday signed an agreement with the Royal Bank of Scotland Group (RBS) to acquire select RBS businesses in Asia for A$687 million (US$550 million).
The acquisition includes RBS’ retail, wealth and commercial businesses in Taiwan, Singapore, Indonesia and Hong Kong, as well as its institutional banking businesses in Taiwan, the Philippines and Vietnam, its press statement said.
The purchase price represented an A$62 million premium to, or 1.1 times, the fully provided recapitalized net tangible book value, although the final price will be based on the value at completion, the statement said.
“The acquisition is a further stepping stone in our super regional strategy and creates a new platform for our retail and wealth businesses in Asia,” ANZ chief executive officer Mike Smith told a media briefing in Hong Kong.
“This acquisition deepens our capability in the region with RBS people who have the talent and experience to help accelerate our super regional strategy and to continue to support customers,” he said.
The portfolio of acquired businesses covers 54 branches, US$3.2 billion in loans, US$7.1 billion in deposits and a customer base of approximately 2 million, ANZ said.
It plans to fund the acquisition from the proceeds of its recent institutional share placement, the bank’s statement said.
Upon the completion of the acquisition, ANZ’s pro forma tier 1 capital ratio would be 9.5 percent, it said.
ANZ promised to deliver cash earnings per share accretive within two years after completing the acquisition, it said.
As part of the acquisition, ANZ has also put in place a transitional services agreement and a product supply agreement with RBS while retention agreements have been put in place with key RBS employees, the bank said.
The acquisition of each business is subject to regulatory approvals, including local prudential regulatory approval, it said.
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