DBS in talks for SocGen Asia unit

PUBLISHED : Thursday, 23 January, 2014, 1:19am
UPDATED : Monday, 17 March, 2014, 3:50pm

Singapore's DBS Group is in advanced talks to buy Societe Generale's Asian private bank, a deal that would help boost its private banking assets by almost a third, sources said.

It was unclear how much Southeast Asia's biggest lender would be willing to pay for the bank, but previous estimates from financial sources have valued it at between US$300 million and US$400 million.

A successful deal would make it the third major transaction in Asia's competitive private banking landscape since the global financial crisis, as smaller players struggle to generate enough revenue to support expensive bankers and rising regulatory costs.

DBS managed US$46 billion in private banking assets at the end of 2012 and that could rise by a further US$15 billion if it takes over Societe Generale's Asia unit, the sources said. That would make it Asia's sixth or seventh largest private bank in an industry dominated by UBS and Citigroup with assets of more than US$200 billion each.

Sources said the discussions between DBS and France-based Societe Generale were advanced, with one characterising the talks as being at a "delicate stage".

A DBS spokeswoman reiterated the bank's stance that boosting wealth management is one of its key strategic priorities but declined to comment on the possibility of talks.

A Singapore-based Societe Generale spokeswoman declined to comment.

DBS and ABN Amro had emerged as front-runners after five suitors were short-listed in the final round of bids, the sources said. It was not immediately clear if ABN Amro was still in the picture.

Profit margins are thin for the industry's smaller players, especially those managing less than US$20 billion, because the asset bases at those levels do not generate enough revenue to support expensive bankers and other costs.

In 2009, ING sold its private bank to Singapore's Oversea-Chinese Banking Corp.