DBS buys private banking business of Societe Generale in Singapore and Hong Kong
Purchase of Societe Generale businesses part of a trend to capture new wealth on the mainland
DBS, Southeast Asia's largest bank, is paying US$220 million for the private banking business of Societe Generale in Singapore and Hong Kong and selected parts of the French bank's trust business in a trend that has seen Western banks unload their private banking operations in Asia for higher capital.
By acquiring private banking assets in the region, Singapore-based DBS is hoping to capture some of the wealth being created in China and in northern Asia.
As part of the trend, Dutch ING Group sold its private bank to Singapore's Oversea-Chinese Banking Corp for US$1.64 billion in 2009, followed by Bank of America selling its overseas private banking unit to Switzerland's Julius Baer in 2012.
"Wealth creation in China is one of the mega trends in the private banking and wealth management areas, not only in Asia but around the world," Sebastian Paredes, CEO of the bank's Hong Kong operation, said yesterday. "That would make North Asia one of the most exciting places to be for private banking."
The rapid growth of high-net-worth individuals in China will help the Asia-Pacific region top the United States and Europe in the number of millionaires by 2016, said a report from the Royal Bank of Canada.
Chng Sok Hui, chief financial officer at DBS, said the acquisition would raise the bank's earnings per share by 1 per cent in two to three years.
