Sat, Sep 14, 2013 - Page 13 News List

Societe Generale considering selling its Asia private banking unit, sources say

Bloomberg

Societe Generale SA, France’s second-largest bank by market value, is considering selling its Asia private banking unit, four people with knowledge of the matter said.

The Paris-based bank has reached out to possible bidders to gauge their interest, the people said, asking not to be identified because the process is private. SocGen may send financial information on the unit to potential suitors as early as this month, one person said.

Wealth management firms expect more mergers and acquisitions in their industry amid pressure on margins, and increased regulatory and tax scrutiny, PricewaterhouseCoopers LLP said in June. Asia is the fastest-growing region for private banks, according to McKinsey & Co.

“There are players who would want to bulk up on their assets under management and client advisers to add scale to their business,” said Tjun Tang, head of Boston Consulting Group’s financial services practice in the Asia-Pacific region.

“For others, if you’ve got no pathway to growth and profitability, then maybe it makes sense strategically to exit,” he added.

Tang said potential acquirers include regional Asian banks or “mid to larger-sized” international private banks, which typically manage US$25 billion to US$75 billion of assets.

SocGen, led in Asia by Olivier Gougeon, has serviced private-banking clients in Asia through Singapore and Hong Kong since 1997, according to its Web site. Societe Generale’s private banking business is active in 16 countries with about 2,500 employees.

Societe Generale spokeswoman Nathalie Boschat in Paris declined to comment. JPMorgan Chase & Co is working with SocGen on the sale, two people said.

Millionaires in Asia outside Japan will create US$7 trillion in net new wealth by 2016, boosting the share of global riches from emerging markets, McKinsey said in June, based on a survey of private banks.

SocGen agreed in July to sell its Japanese private banking operations to Sumitomo Mitsui Financial Group Inc. Last year, it retreated from North America with the sale of a minority stake in Rockefeller Financial Services Inc and its shares in Canadian Wealth Management Group Inc.

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