'DBS and Julius Baer eyeing Barclays Asia wealth unit'

Since the financial crisis, Asia has seen a spate of private banking deals, including Bank of America selling its Asia and other non-US private banking business to Julius Baer - a potential bidder for the Barclays Asia wealth unit.
Since the financial crisis, Asia has seen a spate of private banking deals, including Bank of America selling its Asia and other non-US private banking business to Julius Baer - a potential bidder for the Barclays Asia wealth unit.PHOTO: BLOOMBERG

No formal sale process for $848m business but bank 'weighing' deal

SINGAPORE/MUMBAI • DBS Group Holdings and Julius Baer are seen as potential bidders for Barclays' Asian private wealth business, valued at about US$600 million (S$848 million), sources familiar with the matter told Reuters.

Barclays is weighing the sale, even though a formal sale process has not begun, according to the sources.

DBS sees wealth management as a core growth business and is keen to expand in that area, having bought Societe Generale's Asian private bank for US$220 million last year.

While Barclays declined to say whether a sale was on the cards, several smaller Asian private banks that have struggled to generate enough revenue to pay expensive bankers and cover rising regulatory costs have been sold recently.

"We are working through cellular analysis which examines what we do best and where. This has caused some speculation as we have numerous business lines and geographies," a Barclays Singapore spokesman said.

DBS and Julius Baer are the two most likely bidders for the business if it comes up for sale, two people familiar with the matter said. The sources declined to be identified as the discussions were confidential.

"Barclays is doing soft marketing for the sale of the unit," said a source with knowledge of the matter, adding that Swiss banks were interested.

DBS' head of wealth management Tan Su Shan told Reuters in June that DBS was aiming for a 40 per cent jump in its private banking assets to US$100 billion in less than three years.

Barclays managed US$36 billion in private banking assets in Asia as of last year, according to a survey by industry publication Private Banker International, ranking it 14th in Asia. DBS was ranked eighth.

UBS and Citigroup were the top private banks in Asia, according to the survey, followed by Credit

Suisse, which has also made Asia its priority region for business growth.

Asia has seen a spate of deals in the private banking sector since the financial crisis, notably in 2009 when ING offloaded its Asian private bank to OCBC Bank for US$1.5 billion. Other deals included Bank of America selling its Asia and other non-United States private banking business to Julius Baer, and smaller deals include HSBC selling its Japan private bank to Credit Suisse.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 19, 2015, with the headline ''DBS and Julius Baer eyeing Barclays Asia wealth unit''. Print Edition | Subscribe