Western private banks facing growing regional challenge

Western-based private banks should clear some space for growing regional players in the market. That is the message from DBS after it finalised the buyout of France's Societe Generale's private banking and wealth management arm in Hong Kong and Singapore.

"The global players continue to be dominant in this market but what's different is that the regional banks are up and rising," said DBS Private Bank's managing director Januar Tjandra.

The US$220 million acquisition of Societe Generale's regional private banking business is the third major buyout in that segment of the market since 2009, and the second in which a regional bank has bought a troubled Western-based business.

The deal boosted the assets under management by DBS by about 30 per cent.

Oversea-Chinese Banking Corp acquired ING Group's Asia private banking business for US$1.5 billion in 2009 as the struggling Dutch-based bank unloaded several of its businesses.

The ING operation, renamed Bank of Singapore, tripled OCBC's private banking assets and made the bank Singapore's second-biggest by assets after DBS. DBS reportedly bid on the deal but dropped out.

In 2012, private Swiss bank Julius Baer announced it would buy Merrill Lynch's global private banking business, including its Asia business, for US$840 million.