The bidders for ING's Asian private wealth assets have narrowed and those left in the field have contrasting charms.

A month or so ago there were a half dozen banks touted as potential buyers for ING’s Asian private bank. Now, as the sale starts to get serious there would seem to be only three left and their diversity presents a fascinating contrast.

As the sale moves to its final stage, global giant
HSBC, Singapore’s Government-linked
DBS and Switzerland’s “pure play” private bank
Julius Baer are, from all reports and inside industry gossip, the ones still in the hunt.

Along the way the likes of Standard Chartered, Credit Suisse and Australia’s CBA and ANZ all fell by the wayside, running the ruler over the operation before deciding not to proceed.

ING’s Asian private bank is outside the region’s top ten, but the purchaser can expect the acquisition will consolidate their position as a major player in Asia. Employing around 500 people, ING Asia had assets of just over $17 billion at the end of 2008, almost half the level at the 2007 peak.

The purchase is expected to bring around $2 billion – 1.5 times book value – of proceeds that will be used to pay the Dutch Government back for the €10 billion ($14.8 billion) lifeline it extended to the ING parent a year ago.

Looking at the three remaining bidders, it means different things to each of them because they are very different banks. For HSBC, it means taking out a competitor, denying a rival the opportunity to expand while at the same time increasing its regional dominance.

The story at DBS is different: the bank began a program of regional expansion at the turn of the decade under the leadership of Jackson Tai, and while it is now in a dozen or so Asian markets its private banking – on a regional scale at least – is still a work in progress.

Julius Baer, which reports this week claim is the favoured bidder, couldn’t be more different from either HSBC or DBS. The Swiss specialist only does private banking, there is no retail or investment bank, or even a more downmarket wealth management division.

The last two years have seen exponential growth for Julius Baer throughout Asia as it has beefed up its Singapore base and then expanded into other regional markets. 

Up until the slowdown began last year, Julius Baer enjoyed a compound growth rate of better than 150 per cent over three years in Singapore, earning the 2008 title of the city-state’s fastest growing financial services company from the DP Information Group last year.

With a regional headcount of around 250, the bank plans to add another 100 or so more staff in Asia this decade. Only last October, Wilfried Kofmehl – the bank’s Southeast Asia chief – said he expected Asia to account for as much as 20 per cent of the bank’s global business within three to five years.

For a bank with these ambitions, the ING assets represent a way of getting bigger faster and getting a jump on some of the other players whose growth has stalled over the last year or so.

One sale

Reports have claimed that ING wants to sell its Asian and European private banking operations in one sale, and if that is the case then perhaps the deal will come down to either HSBC or Julius Baer, as DBS is unlikely to be interested in Europe.

Getting value out of the assets in Asia might also be harder than just purchasing the name and subsuming it. Private banking is a highly personal business, and ING in Asia relies very strongly on the charms of Renato de Guzman, who has worked with ING since 1990 and headed the Asian private bank since 2000.

The urbane and likeable Mr Guzman, a Philippino, has created a private bank in his own image and has enjoyed staff turnover significantly below levels for the rest of the industry.

His is a happy ship and it is a certainty that any bidders would have done their due diligence on whether the popular captain was likely to stay.