In a surprise move the Singaporean bank DBS is to acquire ANZ’s wealth management and retail banking business in Singapore, Hong Kong, China, Taiwan and Indonesia.

DBS Bank (DBS) announced today that it has agreed to acquire the wealth management and retail banking business of ANZ in five markets for approximately SGD 110 million above book value.

The portfolio of businesses being acquired is in Singapore, Hong Kong, China, Taiwan and Indonesia, representing total deposits of SGD 17 billion, loans of SGD 11 billion, investment AUM of SGD 6.5 billion and total revenue of SGD 825 million for the full year of 2016.

Quick Return on Investment

These business units serve about 1.3 million customers, of which over 100,000 are affluent/ private wealth customers and 1.2 million are retail customers.

DBS claims it expects the transaction to create significant value for the bank. With its scale in the five markets, it will be able to bolt on the ANZ business to its existing platform, and benefit from efficiencies especially in technology and branch distribution. The transaction is expected to yield return on equity and earnings accretive one year after completion.

Digital Strategy Expansion

The acquisition of the businesses in each jurisdiction is independent of each other. Subject to obtaining regulatory approvals, the transaction is anticipated to be completed progressively from the second quarter of 2017 onwards, and the target is for full completion in all markets by early 2018.

The deal further cements DBS’ position as a leading wealth manager in Asia and enables rapid scale-up of digital strategy in Indonesia and Taiwan. 

Significant Indonesian and Taiwanese Boost

The acquisition will also add a large customer franchise to DBS in Indonesia and Taiwan, which are key markets for the bank. In Indonesia, DBS will gain about 410,000 customers, effectively increasing its base by six times. In Taiwan, DBS will add around 530,000 customers, expanding its base by 2.5 times. A significant portion of these are credit card customers. With a larger scale in both markets, the bank will be able to fast-track the build-out of its digital strategy.

“Over the years, DBS has made significant strides in the wealth business, and recently became the first Singapore and Asian bank to break into the top five private banks in Asia-Pacific. This acquisition will further cement our leadership position. It also gives ANZ’s wealth customers access to more tailored solutions and a full suite of universal banking products supported by Asian insights, research and investment advice. At the same time, the transaction provides us with a significant consumer platform in Indonesia and Taiwan that will enable us to more quickly build out our digital agenda, »said Tan Su Shan, Group Head of Consumer Banking & Wealth Management of DBS,