UPDATE:Julius Baer Buys ING Swiss Private-Bking For $500 Million-Source
October 07 2009 - 12:13AM
Dow Jones News
ING Groep NV (ING) will sell its Swiss private banking assets to
Swiss wealth manager Julius Baer Holding AG (JBHGY) for US$500
million, a person familiar with the situation said Wednesday.
The Dutch banking and insurance company is also set to raise
US$1.5 billion from its sale of Asian private banking assets, in a
deal that should be finalized "within the next few weeks", he said.
ING has been trying to slim down and sell its private-banking
businesses in Europe and Asia, after it was forced to turn to the
Dutch government for aid last year.
Julius Baer, which won the Swiss assets, submitted the highest
bid and was willing to "move quickly" to seal the deal, the person
said Wednesday. There were two other bids for the assets, he said,
but declined to elaborate.
ING's Swiss private banking operations have about US$5 billion
in assets under management and recorded a net profit of about US$20
million in the January-August period, the person added.
ING has picked a buyer for the Asian assets - which are three
times bigger in terms of assets managed than the Swiss ones - but
final agreement has been held back pending approval by Singapore's
monetary authority, he said.
Anyone running private banking in Singapore, according to
domestic regulations, has to be vetted by regulators in the
city-state, a major regional hub for private banking.
HSBC Holdings PLC (HBC) was a frontrunner in the bidding for the
Asian assets, people familiar with the situation had said earlier.
Being in high-growth Asia, the Asian private banking assets of ING
are also more profitable than the Swiss ones, they said.
Bidding for ING's private banking assets was more
hotly-contested than expected, people said earlier, especially amid
uncertainties over tax evasion charges against Swiss banks' U.S.
private banking clients. Until recently, UBS AG (UBS) was embroiled
in a tax lawsuit and had to handover data on 4,450 clients. The
case was settled between the Swiss and the U.S. governments in
September.
Among those that bid for the Asian private banking assets were
Julius Baer, which bid for that as well as the Swiss assets, HSBC
and Singapore's DBS Group Holdings Ltd. (D06.SG)
An announcement on ING's Swiss private banking sale will be made
later Wednesday before European markets open, two people said.
ING declined to comment on market speculation, and Julius Baer
and HSBC couldn't be immediately reached.
ING is targeting EUR6 billion-EUR8 billion in asset sales to
help pay down a EUR10 billion lifeline it received from the Dutch
government last October to underpin its core capital. Last month,
it sold to Australia and New Zealand Banking Group Ltd. (ANZBY) a
51% stake in their Australia and New Zealand wealth management and
life insurance joint venture for EUR1.1 billion.
-By Amy Or, Dow Jones Newswires; 852-2832 2335;
amy.or@dowjones.com