The Australia & New Zealand Banking Group is to sell the retail and wealth management businesses in Hong Kong, Singapore, China, Taiwan and Indonesia for S$110m above book value to DBS Group, also the largest bank in southeast Asia, the two lenders announced in separate statements on Monday.
The deal, expected to complete by early 2018, will take DBS’ high net worth AUM to S$115bn, and total wealth AUM to S$182bn, according to the bank.
The bank was ranked the fifth largest private bank by AUM in Asia-Pacific after UBS, Citi, Credit Suisse and HSBC in 2015, according to Private Banker International.
The bulk of acquired assets include total deposits of S$17bn, loans of S$11bn, with 1.3 million customers – 410,000 from Indonesia and about 530,000 from Taiwan. Among the total, more than 100,000 are private wealth clients.
The move “cements DBS’ position as a leading wealth manager in Asia, enables rapid scale-up of digital strategy in Indonesia and Taiwan, and creates financial value – ROE [return on equity] and earnings accretive one year after completion,” the bank said.
Tan Su Shan, DBS head of consumer banking and wealth management, said the takeover “also gives ANZ’s wealth customers access to more tailored solutions and a full suite of universal banking products supported by Asian insights, research and investment advice.”
ANZ, meanwhile, will take a loss of A$265m ($201m) from the deal. Chief executive Shayne Elliot said in the statement that the bank’s priority is now on the “large corporate and institutional clients driven by trade and capital flows particularly with Australia and New Zealand”.
He noted further investments to the retail and wealth units “do not make sense for us given our competitive position and the returns available to ANZ”, and that “DBS plans to take on the majority of our staff".
Banks continue to streamline their operations by selling off wealth management units in Asia.
In 2014, DBS bought the private banking activities of Societe Generale operated in Singapore and Hong Kong.
However, DBS lost to rival OCBC in a bid to buy Barclays’ wealth and investment management business in Asia in April this year.
In the same month, UBP closed the acquisition of Coutts' wealth management operations in Hong Kong and Singapore, which brought $9bn to the bank's platform.
There are rumours that Deutsche Bank, which has serious financial troubles, could also offload some assets in Asia, although the bank denies this. Earlier ths month, Deutsche Bank's head of Asia Pacific wealth management, Ravi Raju, was reported to have left to join UBS, according to Reuters.
In addition, Netherlands-based ABN Amro Group is believed to be considering the sale of its Asia private banking business, Bloomberg reported.