Singapore bank Oversea-Chinese Banking Corp. Ltd. said Tuesday that it is in discussions with Dutch financial-services company ING Group NV (ING) relating to a possible acquisition of ING's Asian private-banking assets, which is consistent with OCBC's strategy of looking for growth opportunities in the region.
However, OCBC said there is no certainty that any transaction or agreement will result from the discussions. The bank also advised shareholders to be cautious while dealing with the shares and not to take any action in respect of their shares in the bank, which may be prejudicial to their interests.
OCBC said in a statement that it will make an appropriate announcement at the relevant time should circumstances merit such an announcement.
In July, the Wall Street Journal had reported that ING Groep seeks buyers for its private-banking business in Europe and Asia and any deal is likely several months away. Reports said that potential bidders for the division, which could be valued at more than $1 billion, may include Credit Suisse Group, Standard Chartered Plc. (STAN.L) as well as banks in Singapore and Australia.
ING Groep is said to be narrowing its focus and expects to raise between €6 billion and €8 billion by selling between 10 and 15 units.
On August 26, ING had asked for final bids for its private banking operations seeking about $1.8 billion and expected Asian private banking operations to contribute about 70% of the proceeds.
HSBC Holdings PLC (HBC, HSBA.L), Swiss wealth manager Julius Baer Holding AG and Singapore's DBS Group Holdings Ltd. were among other bidders that submitted binding offers.
On September 11, WSJ reported that Standard Chartered dropped its bid to buy ING's Swiss and Asian private banking business. Before the deadline for binding bids on September 3, Credit Suisse Group had dropped out of the auction.
Bidders were given the option by ING and its adviser on the sale, J.P. Morgan Chase & Co., to make an offer for both the Swiss and Asian business or just one of the two units, but ING reportedly preferred to sell the units together.
Last Wednesday, ING had agreed to sell its Swiss private banking business ING Bank (Switzerland) Ltd. to Julius Baer Group Ltd. for CHF 520 million, or EUR 344 million, in cash. The transaction is expected to close in the first quarter of 2010, subject to regulatory approval. ING estimates the transaction to generate a net profit of EUR 150 million and to free up capital of EUR 200 million.
Yesterday, WSJ had reported that OCBC is competing with Singaporean rival DBS Group and HSBC Holdings to acquire the Asian private-banking assets and that OCBC has submitted a bid for the ING assets.
Today, reports said that DBS has pulled out of the race to buy ING's private banking unit in Asia, as it did not want to pay a premium for the business.
ING closed Monday's regular trading at $18.36 on the NYSE.
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