DBS and Julius Baer may bid for ABN Amro unit

A woman walks past a branch of Swiss private bank Julius Baer in Zurich, Switzerland.
A woman walks past a branch of Swiss private bank Julius Baer in Zurich, Switzerland.PHOTO: AFP

DBS Group Holdings and Julius Baer Group are weighing bids for Dutch lender ABN Amro Group's Asia private-banking business, which manages about US$20 billion (S$28 billion) in assets, said several people with direct knowledge of the matter.

ABN Amro, which has hired Lazard to advise on the sale, could also receive preliminary bids from other wealth managers, those people said, adding that first-round bids are due in the next few weeks.

The two banks have expressed interest in the ABN Amro unit and will study more detailed information on its business, according to those people, who asked not to be identified because the process is private.

ABN Amro hopes to announce a deal by the year end to minimise uncertainty for its private bankers and clients, they said.

The sale could fetch between US$300 million and US$350 million, or 1.50 per cent to 1.75 per cent of assets under management, senior mergers and acquisitions bankers said, citing valuations for similar deals.

The Dutch bank's plan comes after several Western firms have withdrawn from private banking in Asia, hit by pressure to cut costs at home, slowing growth in the region and rising compliance costs.

Earlier this year, Barclays agreed to sell its wealth and investment management business in Hong Kong and Singapore to a unit of Singapore's OCBC Bank.

ABN Amro is the 18th-largest private bank in Asia, with US$19 billion of assets under management in the region, according to a ranking by Asian Private Banker last year.

ABN Amro is the 18th-largest private bank in Asia, with US$19 billion of assets under management in the region, according to a ranking by Asian Private Banker last year.

The bank declined to comment on whether there was a plan to sell the business, but said in an e-mail statement that it had cut over 20 jobs in Hong Kong and Singapore in the past months to make its business more efficient.

The bank, which returned to the stock market last November after seven years in government hands, currently has about 130 bankers to the rich in Asia and the Middle East.

DBS, Julius Baer and Lazard declined to comment. Sources declined to be identified as the talks were confidential.

While some smaller Western wealth managers have left the region, Asia is emerging as a key battleground for firms like UBS and Credit Suisse as their traditional markets show slower growth and countries like China and India produce more millionaires.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on October 26, 2016, with the headline 'DBS and Julius Baer may bid for ABN Amro unit'. Print Edition | Subscribe