DBS said to mull buying ABN Amro's Asia private banking business

The head office of ABN Amro bank is seen in Amsterdam.
The head office of ABN Amro bank is seen in Amsterdam.PHOTO: REUTERS

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

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

The sale could fetch between US$300 million and US$350 million, or 1.50-1.75 per cent of assets under management, senior M&A 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The Dutch bank's plan comes after several Western firms have withdrawn from private banking in Asia, hit by pressure to reduce costs at home, slowing growth in the region and rising compliance costs.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 Oversea-Chinese Banking Corp (OCBC).

ABN Amro is the 18th-largest private bank in Asia, with US$19 billion of assets under management in the region, according to a 2015 ranking by Asian Private Banker.

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

The bank, which returned to the stock market in 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 such as UBS and Credit Suisse as their traditional markets show slower growth and as countries like China and India produce more millionaires.

With nearly 5 million individuals with US$1 million in liquid assets, Asia Pacific is the fastest growing wealth region in the world.