DBS Bank has agreed to acquire the wealth management and retail banking business of Australia and New Zealand Banking Group (ANZ) in five Asian markets.
The Singapore-based bank said the markets where the businesses of ANZ will be acquired include Singapore, Hong Kong, China, Taiwan and Indonesia. While the exact deal value was not mentioned, DBS said it will pay about S$110m (£64.84m, $79.03m) above book value.
DBS said it will benefit from the deal as it would add S$23bn of wealth assets to its books, taking its total wealth assets under management (AUM) to S$182bn. The deal will also increase its high net worth clients by S$6bn, taking its high net worth AUM to S$115bn.
Acquiring these operations from ANZ will also increase DBS' client base. The bank said the businesses it is acquiring currently serve about 1.3 million customers, of whom more than 100,000 are affluent wealth customers; the remaining 1.2 million are retail customers.
DBS said the deal would help cement its position as a leading wealth manager in Asia and also allow for a rapid scale-up of its digital strategy in both Indonesia and Taiwan, both of which are its key markets.
DBS said the deal would create value as it expects ROE and earnings to be accretive one year after completion. It added that the deal would also create cost efficiencies, primarily across technology and branch distribution.
Tan Su Shan, Group Head of Consumer Banking & Wealth Management of DBS, said in a statement: "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."
In a separate statement, ANZ said it will take a net loss of A$265m (£165.41m, $201.59m) on the deal. It added that the deal would allow it to focus more on its institutional banking business in the continent. ANZ CEO Shayne Elliott said: "Our strategic priority is to create a simpler, better capitalised, better balanced bank focussed on attractive areas where we can carve out winning positions.
"Asia remains core to ANZ's strategy. This transaction simplifies our business while allowing us to continue to benefit from higher levels of growth in the region through a focus on our largest, most successful business in Asia - banking large corporate and institutional clients driven by trade and capital flows particularly with Australia and New Zealand."