Australia & New Zealand Banking Group Ltd’s (ANZ) sale of businesses in five Asian markets to DBS Group Holdings Ltd offers the latest sign of consolidation in the region’s highly competitive wealth industry, which has already seen a retreat by European players such as Barclays Plc and Societe Generale SA.
DBS will pay S$110 million (US$79 million) for retail and wealth-management businesses that ANZ operates in Taiwan, Singapore, Hong Kong, China and Indonesia.
The deal will add S$23 billion of wealth assets to DBS’s books, taking its total assets under management to S$182 billion, it said in a stock-exchange filing.
Photo: Bloomberg
Like many of its competitors, DBS expanded its wealth business in recent years to profit from Asia’s burgeoning ranks of millionaires, and is now seeking to capitalize on the retreat of rivals who are under pressure to cut costs and focus on higher-returning businesses.
DBS bought Societe Generale’s Asian wealth-management division in 2014 and is said to be considering a bid for ABN Amro Group NV’s private-banking business in the region.
“Times are bad but this is also when assets are cheap,” Kevin Kwek, an analyst at Sanford C. Bernstein & Co, said in an e-mailed reply to questions. “You have a situation where one man’s poison is another man’s meat.”
Earlier this year, DBS lost out to smaller Singaporean competitor Oversea-Chinese Banking Corp (華僑銀行) in buying Barclays’s wealth and investment-management business in Asia.
Bahren Shaari, the chief executive officer of OCBC’s private-banking arm last year foreshadowed more consolidation in wealth management Asia as smaller players find it harder to offer the range of services demanded by the rich.
ANZ said it will take a A$265 million (US$201 million) loss on the deal, which marks a major step in chief executive officer Shayne Elliott’s drive to unwind his predecessor’s expansion into Asia. The bank had previously been seeking to earn as much as 30 percent of profit from outside Australia and New Zealand by next year.
“Our strategic priority is to create a simpler, better capitalized, better balanced bank focused on attractive areas where we can carve out winning positions,” Elliott said in a statement to the stock exchange.
ANZ will focus its resources in Asia on institutional banking, he said.
The Melbourne-based lender is still reviewing its businesses in Cambodia, Laos, Vietnam and the Philippines, Elliott said on a call with investors.
DBS is aiming to complete the purchases from ANZ by early 2018, the bank said.
The businesses being acquired have total deposits of S$17 billion, loans of S$11 billion and serve about 1.3 million customers, including 100,000 high net-worth individuals, the bank said.
The lender was ranked fifth in terms of assets under management last year, according to figures compiled by Private Banker International.
UBS Group AG and Citigroup In. were ranked first and second respectively, each with assets exceeding US$200 billion.
“DBS has made significant strides in the wealth business, and recently became the first Singapore and Asian bank to break into the top five private banks in Asia-Pacific,” Tan Su Shan, the lender’s consumer banking and wealth management head, said in the statement. “This acquisition will further cement our leadership position.”
Separately, DBS, Southeast Asia’s largest lender, yesterday said that net income was little changed at S$1.07 billion in the three months to September from a year earlier as soaring allowances for credit and other losses offset gains from non-interest income.
Provisions for soured assets jumped to S$436 million from S$178 million a year ago.
TAIWAN
The acquisition will expand DBS’ customer base in Taiwan by 530,000 or by about 2.5 times, it said, adding that a significant portion of these are credit card customers.
Taiwan has delivered a solid growth performance in DBS’ consumer banking since the acquisition of Bowa Bank (寶華銀行) in 2008, and the latest expansion would help strengthen the company’s presence in the Taiwan market, DBS Bank (Taiwan) general manager Jerry Chen (陳亮丞) said.
DBS is also expected to take on the majority of staff in the ANZ’s wealth management and retail banking units, Elliott said.
ANZ Bank Taiwan has about 1,200 employees in Taiwan, including supporting function departments, a company official said.
Additonal reporting by Ted Chen
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
Industrial production expanded 22.31 percent annually last month to 107.51, as increases in demand for high-performance computing (HPC) and artificial intelligence (AI) applications drove demand for locally-made chips and components. The manufacturing production index climbed 23.68 percent year-on-year to 108.37, marking the 14th consecutive month of increase, the Ministry of Economic Affairs said. In the first four months of this year, industrial and manufacturing production indices expanded 14.31 percent and 15.22 percent year-on-year, ministry data showed. The growth momentum is to extend into this month, with the manufacturing production index expected to rise between 11 percent and 15.1 percent annually, Department of Statistics
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
RSS