DBS Bank Ltd (DBS)—an Asian bank headquartered in Singapore—announced yesterday (17 March 2014) that it will be acquiring the Asian private banking business of French bank Societe Generale in Singapore and Hong Kong for S$279 million (US$220 million).
The price represents approximately 1.75 percent of assets under management (AUM) based on Societe Generale Private Banking Asia's (SGPB Asia's) AUM of S$16 billion (US$12.6 billion) as of 31 December 2013, according to DBS' media statement.
The acquisition will "strengthen DBS' wealth management value proposition" and "is expected to be earnings accretive one year after completion," said Piyush Gupta, CEO of DBS.
According to the DBS' media statement, DBS Private Bank and SGPB Asia are complementary in terms of clients, geographical coverage as well as product and service offerings. Thus, the "commercial partnership is a great opportunity for private banking customers to fully benefit from the best of the two banks in Europe and in Asia," said Jean-François Mazaud, Head of Societe Generale Private Banking.
Under the agreement, clients of SGPB Asia will have access to DBS' universal banking platform, including retail, corporate and investment banking. Societe Generale's clients will have access to DBS Private Bank's offering in Asia too. As for clients of DBS, they will have access to Societe Generale Private Banking's offering in Europe as well as Societe Generale's Corporate & Investment Banking solutions.
The purchase price is subject to adjustments based on the net asset value and AUM of the business as at completion of the transaction. The transaction is subject to legal and regulatory approvals as well as certain customary closing conditions, and is expected to be completed in the last quarter of 2014.
According to DBS, the acquisition is not expected to have a material impact on its capital position, its earnings or net asset value per share.