Hong Kong: DBS Group Holdings Ltd and Julius Baer Holding AG are among the potential buyers of ING Groep NV’s private banking operations, three people familiar with the matter said.
Amsterdam-based ING, the biggest Dutch financial-services company, is seeking at least $1.8 billion (Rs8,784 crore) for the assets, two of the people said, speaking on condition of anonymity. DBS and Julius Baer are among the companies picked by ING to enter the final bidding for its Asian and Swiss private banking units as early as next week, they said.
ING, which received a €10 billion (Rs99,957 crore) lifeline in October from the Netherlands, is seeking to raise as much as €8 billion by selling its assets to boost capital. The company’s Asian wealth management operations may draw bids of about $1 billion, the people said. Private banking is a fast-growing sector in Asia and could attract interest from those who want to expand in the region, especially in China, said Yoon Charng Bae, a banking analyst at Seoul-based Hyundai Securities Co. It remains to be seen whether ING’s assets themselves could garner much interest, given its relatively small presence in Asia.
Singapore-based DBS, South East Asia’s largest bank, is seeking to buy ING’s Asian private banking operations, the people said. Julius Baer of Zurich, the Swiss bank splitting off its wealth unit, may bid for both the Asian and Swiss businesses, they said. Australia and New Zealand Banking Group Ltd has also been approached, they said.
Credit Suisse Group AG has entered a preliminary offer and it’s unclear whether the Zurich-based bank will enter the final round of bids, one of the people said. Spokespersons for ING, DBS, Julius Baer and Credit Suisse declined to comment. “We look at opportunities from time-to-time but they need to be consistent with strategy,” said Paul Edwards, a spokesman for Melbourne-based ANZ.
The sale of private banking assets in Asia, home to the world’s two fastest-growing major economies, may attract buyers seeking to expand their wealth-management operations in the region.
China’s number of so-called high net worth individuals, or those with at least $1 million of assets to invest, surpassed that of the UK last year to become the world’s fourth highest, according to the 2009 World Wealth Report by Cap Gemini SA and Merrill Lynch Wealth Management. ING’s attempts to sell the operations may be helped by the 59% rally in the MSCI World Index from a March 9 low.
“We’ve seen a nice rally, so it’s probably more attractive to sell the business now,” said Benoit Petrarque, an analyst at Kepler Capital Markets in Amsterdam who has a buy rating on ING shares. It’s not bad timing to sell in September.
ING’s Asian private banking division has offices in Singapore, Hong Kong and the Philippines, according to its website. Assets under management declined to €11.4 billion in the first quarter of 2009 from €13.1 billion a year earlier. The bank’s Swiss private banking business has eight offices with about 340 employees, according to its website.
The credit crisis has triggered asset sales by major financial firms in the US and Europe, as firms including Citigroup Inc., American International Group Inc. and Royal Bank of Scotland Group Plc. sought to repair balance sheets amid $1.6 trillion of writedowns and losses worldwide.
Martijn Van Der Starre, Jacqueline Simmons, Jeroen Molenaar, Jon Menon and Bomi Lim contributed to this story.