By P.R. Venkat
SINGAPORE--DBS Bank Ltd. said Monday that it is buying Société
Générale SA's Asian private banking business for $220 million,
capitalizing on the region's growing number of millionaires, as
Western banks continue to retreat from the business of serving
Asia's wealthy.
DBS's acquisition of the French bank's regional private banking
operations comes three years after Oversea-Chinese Banking Corp.,
Singapore's second biggest bank after DBS, bought Dutch bank ING's
private banking operations in Asia for $1.64 billion. Swiss private
bank Julius Baer Group AG bought Bank of America's international
private banking operations, including its Asian business, last
year.
Some western banks began cutting back their presence in Asian
private banking in the wake of the financial crisis as stringent
regulatory requirements forced them to keep a higher capital base
at home.
Société Générale put its Asian private banking operations, which
it set up in 1997 out of Hong Kong and Singapore, for sale late
last year, as it moved to bulk up its investment banking
operations. Société Générale is in the process of expanding its
debt capital market operations and financing business in Southeast
Asia.
The acquisition of Société Générale's private banking assets in
the region, with $12.6 billion of assets under management, will be
a big boost for the wealth management operations of DBS Bank, which
is 29% owned by state investment firm Temasek Holdings Pte.
Ltd.
"Asia is growing in affluence and minting more millionaires that
anywhere in the world. To capture opportunities on this front, one
of DBS' strategic priorities is to be a leading wealth player," DBS
chief executive Piyush Gupta said in note to his staff after the
deal.
According to DBS, the bank's total wealth assets under
management, including DBS Treasuries and DBS Private Bank, was 109
billion Singapore dollars (US$86 billion) as of the end of 2013. Of
this, assets under management of high net worth individuals were
S$69 billion, up from S$39 billion four years ago.
While some wealth managers continue to bulk up their presence in
places such as Hong Kong and Singapore by expanding their offices
and hiring people, wealth management has been hurt by slower
economic growth, forcing private banks to focus on costs and keep a
lid on compensation. A growing list of millionaires in China and
beyond has attracted small boutique players who are jostling for
market share against established heavyweights such as UBS AG and
Credit Suisse Group AG.
The Asian-Pacific region will become the biggest wealth market
by population this year, according to a 2013 report by Capgemini
and RBC Wealth Management. Wealth in the Asian-Pacific region has
increased by 27% since 2007, the same report said, putting Asia in
line to overtake North America as the world's wealth center.
The transaction is expected to be completed in the last quarter
of 2014 subject to regulatory approvals, DBS said in a filing to
the Singapore Exchange.
Write to P.R. Venkat at venkat.pr@wsj.com
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