ING Groep NV, the biggest Dutch financial-services company, has asked for final bids for its private banking operations and is seeking about US$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 percent of the proceeds, the person said.
ING, which received a 10 billion euros (US$14.3 billion) lifeline in October from the Netherlands, is seeking to raise as much as 8 billion euros 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 interest from those who want to expand in the region, especially in China,” said Yoon Charng-bae, a banking analyst at Seoul-based Hyundai Securities Co. “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 US$1 million of assets to invest, surpassed that of the UK last year to become the world’s fourth-highest, the 2009 World Wealth Report by Cap Gemini SA and Merrill Lynch Wealth Management shows.
ING and its adviser JPMorgan Chase & Co declined to comment.
ING’s attempts to sell the operations may be helped by the 59 percent 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.”
ING’s second-quarter profit fell 96 percent, 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, said earlier this month that the company would cut 8,219 jobs, more than previously planned, and reduce costs.
The firm raised 1.4 billion euros in February by selling its 70 percent stake in ING Canada Inc, 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 SA last month. Corpvida will pay about US$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, its Web site shows.
Assets under management declined to 11.4 billion euros in the first quarter of this year from 13.1 billion euros a year earlier.
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