Julius Baer,bulking up in its home market,has won the auction to buy the Swiss private banking assets of Dutch financial services group ING for around $500 million,two sources with knowledge of the deal said.
As part of its global restructuring,ING is selling its Asian and Swiss private banking units in what would be the biggest deal in the wealth management industry since the credit crisis began.
The announcement of the sale of the Swiss unit is likely to come later on Wednesday,one of the sources said. “Yes,it is Julius Baer,” one of the sources said. “The amount is around $500 million.” The sources asked not to be identified ahead of the official announcement. Julius Baer and ING declined to comment.
Julius Baer,which recently build its war chest by listing its US asset management arm Artio,has said it is on the lookout for acquisitions with Europe its key strategic market. Ranked after UBS and Credit Suisse as the third biggest wealth manager in Switzerland,Julius Baer is also seeking to build Asia as a second major market.
HSBC and Julius Baer had been seen as the front-runners for the assets. On Tuesday,Julius Baer CEO Boris Collardi said he expected an outcome to the sale “very soon.”
ASIA SALE WEEKS AWAY
The sale of the Swiss assets came more than a month after most bids for the private banking units went in on September 3. The sale of the Asian assets could take more time because of regulatory issues,sources said.
“The Asian sale is a few weeks away,” said one of the sources,adding regulatory approvals from the Monetary Authority of Singapore,the city-state’s central bank,could take time.
HSBC is seen as a front-runner for these assets,while Singapore’s DBS Group had also bid for the Asian assets,sources have said.
“This signals that the consolidation phase has just begun in the industry and we are of the opinion that going forward we will see many such deals coming through in the Asia Pacific market,” said Ravi Nawal,a senior analyst for wealth management at consultant Celent.
HSBC’s CEO of global private banking Chris Meares told the Reuters Wealth Management Summit the bank has looked at ING assets and described the proposed sale by the Dutch bank as a rare opportunity in Asia.
UBS was advising Julius Baer on the bid,while JPMorgan was advising ING and Lazard was advising DBS.
UBS,JPMorgan and Lazard declined to comment.
The sale process of the private banking units is part of ING’s restructuring drive to sell 6-8 billion euros ($8.8-$11.8 billion) in assets and exit 10 of the 48 countries where it does business.
It is also involved in negotiations with the European Union over its 10 billion euro state aid package from last October and its 22 billion euro asset guarantee program from last January.