HONG KONG (Reuters) – Singapore’s DBS Group Holdings has agreed to buy Societe Generale’s (SocGen) Asian private bank for about $250 million, with an announcement expected as early as Monday, sources familiar with the matter told Reuters.
The deal with the French bank would help DBS – Southeast Asia’s biggest lender – to boost its private banking assets by almost a third to about $60 billion.
It would be the third major deal in Asia’s competitive private banking landscape since the global financial crisis, with smaller players retreating as they struggle to generate enough revenue to support expensive bankers and rising regulatory costs.
DBS and SocGen declined to comment on Friday.
Reuters reported in January that DBS was in advanced talks with SocGen for a deal that would be DBS Chief Executive Piyush Gupta’s first since Indonesian regulators blocked his planned $7.2 billion purchase of PT Bank Danamon last year.
Former Citigroup banker Gupta took the helm of DBS in late 2009. Since then he has turned DBS from a laggard to an outperformer, helped by double-digit loan growth and strong fee income from capital markets and wealth management.
The acquisition would turn DBS to into Asia’s sixth or seventh-largest private bank in an industry dominated by UBS and Citigroup.
Economic growth has led to a surge in Asian millionaires and billionaires. Their combined wealth, at $6.6 trillion this year, is expected to overtake that of their European counterparts in 2017 and U.S. peers in 2024, according to a Wealth-X and UBS World Ultra Wealth Report.
But profit margins are thin for smaller private banks, especially those whose revenue-generating asset base is less than $20 billion.
(Editing by Denny Thomas and David Goodman)
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