Singapore’s DBS Group Holdings, an investment holding company which operates via its subsidiary DBS Bank, and Swiss-based Julius Baer Gruppe are reported to be weighing up bids for Dutch lender ABN AMRO Group’s Asia private banking business, according to Reuters.
ABN AMRO, which manages around $20 billion in assets, has hired Lazard Ltd to advise on the sale, which could also see the lender receive preliminary bids from other wealth managers, as first-round bids take place in the next few weeks.
The sale is expected to pull in between $300 million and $350 million, or 1.50-1.75 percent of assets under management, according to senior M&A bankers.
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Cost Reduction Exercise
ABN AMRO’s plan comes after several Western firms have withdrawn from private banking in Asia, hit by pressure to reduce costs at home, slowing growth in the region and rising compliance costs. The lender itself has cut more than 20 jobs in Hong Kong and Singapore in the past few months to make its business more efficient.
Although some of the 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 $1 million in liquid assets, Asia Pacific is the fastest growing wealth region in the world.
Earlier this year, Barclays also agreed to sell its wealth and investment management business in Hong Kong and Singapore to a unit of Singapore’s Oversea-Chinese Banking Corp.