DBS to acquire ANZ retail and wealth business in Asia
Singapore-based DBS Bank is buying the retail and wealth business of Australia and New Zealand-based banking group, ANZ, in Singapore, Hong Kong, China, Taiwan and Indonesia for about SGD 110 million ($79 million) “above book value”.
The exact figure has not been disclosed, but the portfolio represents total deposits of SGD 17 billion ($12.2 billion), loans of SGD 11 billion ($7.9 billion), investment AUM (assets under management) of SGD 6.5 billion ($4.6 billion) and total revenue of SGD 825 million ($592.5 million) for FY2016. They serve about 1.3 million customers in total.
Tan Su Shan, group head of consumer banking and wealth management of DBS, says the transaction, along with the larger portfolio and scale, provides it with a “significant consumer platform in Indonesia and Taiwan that will enable us to more quickly build out our digital agenda”.
DBS says the transaction is expected to be ROE (return on equity) and earnings accretive one year after completion.
In terms of technology, both DBS and the international retail network of ANZ run on Infosys’ Finacle core platform. For wealth management and private banking, DBS is a major user of Avaloq’s flagship system, Avaloq Banking Suite.
ANZ chief executive officer Shayne Elliott says Asia “remains core” to its strategy and cites its “large corporate and institutional clients driven by trade and capital flows particularly with Australia and New Zealand”.
Elliott adds: “Having looked carefully at the business in recent months, it is clear the environment we face has changed and to make a real difference for our retail and wealth customers, we would need to make further investments in our Asian branch network and digital capability. Further investments do not make sense for us given our competitive position and the returns available to ANZ.”
Subject to regulatory approval, ANZ expects the sale of its retail and wealth businesses to be completed during 2017 and early 2018.