Sun, Oct 09, 2016 - Page 16 News List

ABN Amro mulling sale of Asia banking unit: sources

Bloomberg

ABN Amro Group NV, the state-controlled Dutch lender that returned to the stock market last year, is exploring a sale of its Asia private banking business, people with knowledge of the matter said.

The bank is working with a financial adviser and has reached out to potential buyers to gauge their interest, according to the people.

The deliberations are at an early stage, and there is no certainty they will result in a deal, the people said, asking not to be identified, as the information is private.

Foreign lenders including Barclays PLC and Societe Generale SA have sold wealth management operations in Asia to local competitors as the ranks of the region’s wealthy expand.

ABN Amro is the 18th-largest private bank in Asia, with US$19 billion of assets under management in the region, according to a ranking by Asian Private Banker last year.

“The cost to the banks is climbing fast, and some players may just decide to focus back on their more profitable core business,” said Sean Kang, a Singapore-based director for Asia-Pacific wealth management at consulting firm McLagan. “Scale is key in the private banking industry, and you should continue to see consolidation in this space.”

Eighty of the world’s 500 richest people hail from the Asia-Pacific region, and their combined fortunes rose 8.9 percent this year to US$786.8 billion, according to the Bloomberg Billionaires Index.

Outside of Europe, ABN Amro’s private banking operations have offices in Hong Kong, Singapore and Dubai, United Arab Emirates, its Web site shows.

ABN Amro is implementing 200 million euros (US$224 million) of cost cuts as increasing competition, regulatory pressures and low interest rates have hurt earnings since the firm returned to the stock market.

Under government ownership, ABN Amro became a consumer lender primarily focused on the Netherlands.

Bank of Singapore Ltd (新加坡銀行), Oversea-Chinese Banking Corp’s (華僑銀行) private banking arm, last year said there would be more consolidation in wealth management in the region as smaller players find it harder to offer the range of services demanded by the rich.

Its CEO, Bahren Shaari, said wealth managers with less than US$20 billion under management in Asia might find it hard to sustain their operations.

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