DBS Private Bank, which snapped up Société Générale's Asia private banking business for $220 million last year, is still on the lookout for acquisitions as it seeks to burnish its regional ambitions.
The Singaporean bank integrated SocGen's former Asian private banking arm on October 6, partly accounting for a near-25% rise in assets under management to S$133 billion ($98.4 billion) as of end-December. SocGen’s clients transferred more than $10 billion of AUM to DBS.
"The integration has gone well, above expectations," Tan Su Shan, DBS's energetic group head of consumer banking & wealth management, told FinanceAsia in an interview. "We are very focused on building our Asia presence."
Oxford-educated Tan, who joined DBS in 2010 from Morgan Stanley where she was head of Southeast Asia private banking, wants to bulk up but won't do it recklessly. "If an acquisition makes sense and is synergistic we will look at it. We want to grow but the valuation has to right,” Tan said.
According to Tan, the firm lost a few relationship managers following the merger but the majority of the inherited 300-plus staff joined DBS. Olivier Gougeon, the former regional chief executive of SocGen's Asian private banking business, has stayed on as head of international at DBS Private Bank, a remit which covers DBS's non-resident Indian, European, Middle Eastern, African, and Japanese clients along with external asset managers.
DBS's ambitions to grow in Asia is set to heat up competition between global and local players. “The level of competition has gone up a few notches," Nam Soon Liew, EY managing partner, financial services, Asean, told FinanceAsia. "In the last four to five years, especially with Singapore positioning itself as wealth hub, a lot of global players have expanded and regional banks like DBS and OCBC are aggressively building out brands," he said.
Private banking is going through a round of consolidation in Asia and private bankers predict that more European banks will exit the business in the region due to shareholder pressure. In March this year, Royal Bank of Scotland sold its overseas private banking business Coutts International to Switzerland's Union Bancaire Privee.
That trend hits a sweet spot for DBS as it coincides with the bank's regional expansion plans in Asia. “It has to be within a jurisdiction we can operate in. We won’t be doing deals in Europe, US or Latin America,” Tan said.
Bulking up
The acquisition of Société Générale's local private wealth assets has enabled DBS to bulk up at a time when scale is important amid rising costs and increased regulation. It has enabled DBS to scale up in Hong Kong, a key private banking hub in Asia, and DBS staff have already moved into Société Générale's premises at The Landmark in Central.
"We are particularly pleased with Société Générale Hong Kong. It has been a game changer for us; we have doubled our workforce," said Tan. “Our business in Hong Kong has scaled up considerably and we are a significant player in the wealth space there."
According to Tan there is little overlap between Société Générale's and DBS's private banking businesses and she sees further potential for growth.
"Société Générale was quite strong in markets like the Philippines, Brunei, Malaysia and we see some potential for growth there. We also see potential growth in the international non-resident India business and some key Eastern European emerging market clients," Tan said.
Tan also sees the opportunity to grow its family offices business, which refers to private companies that manage investments and trusts for a single family. "Société Générale brought over a team that specialises in family offices and financial intermediaries," Tan said.
While private wealth is growing in Singapore and the region, DBS also faces rising competition from China as the likes of Bank of China step up their presence in Singapore.
“The Chinese banks are doing more within private banking in Singapore,” she said.
Other banks such as Taiwan's ChinaTrust Commercial Bank and United Arab Emirate-based First Gulf Bank have similarly expanded in recent years.
