ING Groep, the biggest Dutch financial-services company, has asked for final bids for its private banking operations and is seeking about $1.8 billion, two people familiar with the matter said.
The Amsterdam-based bank has selected companies to enter final bidding as early as next week, one of the people said. ING expects its Asian private banking operations to contribute about 70 per cent of the proceeds, the person said.
ING, which received a ¤10 billion ($14.3 billion) lifeline in October from the Netherlands, is seeking to raise as much as ¤8 billion selling assets to boost capital. The sale of private banking assets in Asia, home to the world’s two fastest-growing major economies, may attract buyers seeking to expand their wealth-management operations in the region.
“Private banking is a fast-growing sector in Asia and could attract those who want to expand in the region, especially in China,” said Yoon Charng Bae, a banking analyst at Seoul-based Hyundai Securities. “It remains to be seen whether ING’s assets themselves could garner much interest, given its relatively small presence in Asia.”
China’s number of so-called high net worth individuals, or those with at least $1 million of assets to invest, surpassed that of the UK last year to become the world’s fourth-highest, according to the 2009 World Wealth Report by Capgemini and Merrill Lynch Wealth Management.
Asset reshuffle
Raymond Vermeulen, an Amsterdam-based spokesman at ING, declined to comment. Marie Cheung, a Hong Kong-based spokeswoman for JPMorgan Chase & Co., which is advising ING, also declined to comment.
The credit crisis has triggered asset sales by major financial firms in the US and Europe, as companies including Citigroup, American International Group and Royal Bank of Scotland Group sought to repair balance sheets amid $1.6 trillion of writedowns and losses worldwide.
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ING’s attempts to sell the operations may be helped by the 59 per cent rally in the MSCI World Index from a March 9 low.
“We’ve seen a nice rally, so it’s probably more attractive to sell the business now,” said Benoit Petrarque, an analyst at Kepler Capital Markets in Amsterdam who has a “buy” rating on ING shares. “It’s not bad timing to sell in September.”
Profit falls
ING’s second-quarter profit fell 96 per cent, more than analysts estimated, as it set aside money for risky loans and reduced the value of its real-estate holdings. Chief Executive Officer Jan Hommen, who took over in January this month said the company would cut 8,219 jobs, more than previously planned, and reduce costs.
The firm raised ¤1.4 billion in February by selling its 70 per cent stake in ING Canada, that country’s largest property and casualty insurer. The company agreed to sell its annuity and mortgage businesses in Chile to Corp Group Vida Chile last month. Corpvida will pay about $350 million for the assets, Santiago-based newspaper Diario Financiero said.
ING’s Asian private banking division has offices in Singapore, Hong Kong and the Philippines, according to its website. Assets under management declined to ¤11.4 billion in the first quarter of 2009 from ¤13.1 billion a year earlier. The bank’s Swiss private banking business has eight offices with about 340 employees, according to its website.