The Oversea-Chinese Banking Corp (OCBC) yesterday announced the purchase of Dutch lender ING’s Asian private banking business, boosting Singapore’s share of the growing wealth management industry.
The US$1.46 billion cash deal turned OCBC into a major player in a sector that caters to rich individuals and families globally, including the expanding ranks of Asian millionaires seeking a safe place to park their money.
“We are very pleased to have the opportunity to acquire this valuable franchise,” OCBC chief executive David Conner said in a statement, noting that the bank was already established in the mass market.
PHOTO: BLOOMBERG
The assets bought by OCBC include Singapore-based ING Asia Private Bank Ltd and affiliates across the region and will boost OCBC’s presence in key markets including China, India, North Asia, the statement said.
OCBC will take over 5,000 ING clients with assets under management worth US$15.8 billion.
There will be minimal overlap with OCBC’s existing private banking business as less than 20 percent of the funds managed by ING are from Southeast Asia, the statement said.
The acquisition will more than triple the bank’s private client assets under management to US$23 billion and make it one of Asia’s leading private banks, the statement said.
Conner said OCBC was committed to ramping up investment in its private banking operations.
Macquarie Capital Securities banking analyst Tay Chin Seng said it was too early to assess the impact of the acquisition on OCBC’s bottom line.
“The question is how it would boost their business,” Tay said.
Another Singapore bank, DBS Group Holdings, was also bidding to buy ING’s Asian private banking business but announced on Tuesday it was pulling out of the race.
ING, which required a capital injection from the Dutch government to cope with the global crisis, had announced in April plans to sell assets worth up to 8 billion euros (US$11.83 billion) to reduce its risk exposure and focus on core businesses.
OCBC said Asia is the fastest growing private banking market in the world, with assets under management in the region projected to grow 12.8 percent a year between last year and 2013, higher than the global growth of 8.1 percent.
In Singapore, assets under management have risen from US$50 billion in 2000 to US$300 billion this year, the bank said.
A joint study issued on Tuesday by Merrill Lynch and financial consultancy Capgemini said Asia’s high net worth individuals — with investable assets of at least US$1 million — was forecast to grow 8.8 percent annually until 2018, faster than the global average of 7.1 percent.
The OCBC acquisition comes amid improving prospects for Singapore banks following the global financial crisis that began in the US housing market.
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