Julius Baer, DBS Said to Vie for ABN Amro’s Asia Wealth Arm

Updated on
  • LGT Bank also weighing bid for Asia private-banking business
  • ABN Amro may fetch over $300 million, targets deal by year-end

Julius Baer Group Ltd., DBS Group Holdings Ltd. and LGT Bank are considering bids for ABN Amro Group NV’s private-banking business in Asia, people with knowledge of the matter said.

The banks have expressed interest in the ABN Amro unit and will study more detailed information on its business, according to the people, who asked not to be identified because the process is private. ABN Amro hopes to announce a deal by year-end to minimize uncertainty for its private bankers and clients, the people said. 

The business could fetch more than $300 million, based on the valuations of other recent deals, the people said. ABN Amro is the 18th-largest private bank in Asia, with $19 billion of assets under management in the region, according to a 2015 ranking by Asian Private Banker.

A sale by ABN Amro, the state-controlled Dutch lender that relisted its stock last year, would follow similar retreats in the industry by other lenders including Barclays Plc and Societe Generale SA, which sold their wealth-management operations in Asia to local rivals. ABN Amro has been working with a financial adviser to explore a sale of the business, people with knowledge of the matter said this month.

“This trend in consolidation is caused by push factors within the region, where additional investments have to be made in areas such as technology and tightening regulations in order to remain competitive,” Jonathan Chng, a senior analyst at East & Partners Asia Pte in Singapore, said by e-mail. “This, however, provides an unique opportunity for players remaining in Singapore and the region to expand and grow and continue serving the growing wealth business.”

Further Consolidation

Among the world’s 400 richest people, 104 hail from Asia Pacific, and their combined fortunes rose 8.1 percent this year to $888.5 billion, according to the Bloomberg Billionaires Index. Outside Europe, ABN Amro’s private-banking operations have offices in Hong Kong, Singapore and Dubai, its website shows.

Representatives for ABN Amro, Julius Baer, DBS and LGT Group declined to comment.

Oversea-Chinese Banking Corp., Southeast Asia’s second-largest lender, agreed in April to buy the Asia wealth and investment-management business of Barclays for about $320 million. The deal value represented 1.75 percent of Barclay’s assets under management in Singapore and Hong Kong, OCBC said at the time.

Royal Bank of Scotland Group Plc sold its Coutts International private-banking operations to Switzerland’s Union Bancaire Privee this year, while Societe Generale sold its Asian private-banking business to DBS for $220 million in 2014.

Dutch Bailout

Bank of Singapore Ltd., OCBC’s private-banking arm, said last year there will be more consolidation in wealth management in the region as smaller players find it harder to offer the range of services demanded by the rich. Its CEO, Bahren Shaari, said wealth managers with less than $20 billion under management in Asia may find it hard to sustain their operations.

The Dutch government stepped in to rescue ABN Amro in 2008, a year after it was bought by a consortium of three banks in the largest financial-services takeover ever. Under state ownership, ABN Amro became a consumer lender primarily focused on the Netherlands. Chief Executive Officer Gerrit Zalm, who took the helm in 2009, will step down in 2017 after guiding the Dutch lender back to the stock market.

The Netherlands held talks earlier this year to merge ABN Amro with Sweden’s Nordea Bank AB, a person with knowledge of the matter said previously. While Nordea had signaled interest in a deal with ABN Amro, the Dutch government later rejected the proposal, the person said.