DBS says acquiring ANZ Bank's Asia wealth, retail business

Earlier this year, OCBC Bank beat DBS in the race for Barclay's wealth businesses in Singapore and Hong Kong.

Singapore's DBS among banks in bid to buy Barclays' Asian wealth unit
A man uses a Development Bank of Singapore (DBS) automated teller machine in Singapore January 4, 2016.

Singapore's biggest bank, DBS, said it is acquiring the Australia and New Zealand Banking Group's (ANZ) wealth and retail businesses in five Asian countries for S$110 million above book value.

With the acquisition, DBS will add to its portfolio as many as 1.3 million customers, including 100,000 private wealth customers and 1.2 million retail customers.

The latest bid comes on the heels of DBS announcing quarterly results that showed income from wealth management rose 16 percent to S$1.26 billion and assets under management rose 11 percent to S$159 billion.

The businesses DBS is acquiring from ANZ are in Singapore, Hong Kong, China, Taiwan and Indonesia, which had been lapped up by ANZ in 2009 as part of its regional expansion strategy led by former Chief Executive Officer Mike Smith, Reuters reported. The deal was worth US$550 million, including the cost for buying the institutional businesses in Taiwan, the Philippines and Vietnam.

ANZ, Australia's third-largest bank by market value, had taken an A$231 million ((S$244 million) impairment charge on minority investments in Asian banks in May, and launched a review of its Asian wealth management business. The bank has been downsizing its exposure in Asia over the last year.

The portfolios DBS will acquire are S$17 billion in deposits, loans worth S$11 billion and investment assets under management of S$6.5 billion.

DBS said it made a marginal improvement in net profit in the third quarter, reporting S$1.071 billion compared with S$1.066 billion a year ago, aided by higher income and lower expenses.

As of the quarter ended September 30, 2016, income from wealth management was S$3.20 billion, the bank said in its quarterly earnings report.

"The resilience of our earnings and balance sheet in challenging operating conditions this year underscores the quality of our franchise. Investments to digitise the bank and efforts to manage costs are galvanising into faster productivity gains," DBS CEO Piyush Gupta said.

Earlier this year, OCBC Bank, Singapore's second biggest lender, beat DBS in the race for British bank Barclay's wealth and investment management businesses in Singapore and Hong Kong.

Oversea-Chinese Banking Corp said its private banking subsidiary Bank of Singapore has agreed to buy part of Barclay's wealth management business for $320 million.

OCBC last week reported a better-than-expected 5 percent rise in third-quarter profit.