Is ABN Amro Next Domino to Fall?

ABN Amro, Head Office in Amsterdam

ABN Amro, Head Office in Amsterdam

Bank of Singapore CEO, Bahren Shaari, recently commented that wealth managers with less than $20 billion under management in Asia may find it hard to continue their operations. ABN Amro has in the region of 140 relationship managers and an estimated $19 billion under management.

A report from financial news agency «Bloomberg» has suggested that government controlled Dutch bank ABN Amro (ABN) is sounding out potential buyers for its Asian private-banking business. The news comes in the wake of recent departures out of Asian Private Banking by Societe Generale, Barclays Wealth and Coutts.

ABN recently announced the appointment of Anuj Khanna as head of Private Banking for South East Asia, at the time several industry observers opined that the move could indicate the bank was appointing a seasoned wealth management professional who could manage the potential disposal of the Asian private banking units.  

This time around the potential suitors could be a much larger group than those who tussled over their predecessors. 

Digest Another Business?

The usual local names of DBS and Bank of Singapore will inevitably be mentioned and they both could be seriously interested parties. For the Amsterdam headquartered bank selling to an Asian domiciled institution would also enable them to maintain a good working business relationship into the region.

However the Singaporean firms might not have the field all to themselves this time around and are they ready to digest another business at this time?

More Interested Parties

There are at least two other strong contenders and some new players who were not in the acquisition game last time around.

Both Julius Baer and Credit Suisse have been aggressively adding relationship managers (RM) to their Asian units throughout this year. Organic growth though is time consuming and the lead-time getting RM’s up to speed can be lengthy. The potential to add ready-made teams in both Singapore and Hong Kong might see these two Swiss giants seriously consider the Dutch lenders wealth business.

Ian Pollock, currently the Regional Head of Private Banking International, North Asia at ABN in Hong Kong, has past ties to Julius Baer. Pollock was the Managing Director, CFO Asia & COO North Asia from 2009 through to 2011 with Julius Baer, so presumably he knows the business and could quickly integrate his teams into the corporate culture.

New Players Emerging

In the case of Credit Suisse, Helman Sitohang is running the Asian business with more autonomy and with CEO Tidjane Thiam as a supporter of Asian business growth, the purchase of the ABN units could make sense.

Then there is Geneva-based Union Bancaire Privee (UBP) who recently bought the Coutts Asian units. UBP is privately owned and can make decisions quickly; also in their favour is a track record of doing business with ABN. In 2011, UBP acquired the Swiss Private Banking arm of ABN.

Growth Is on the Table

Another potential buyer which might be under the radar is Cazenove Capital Management the wealth management business of Schroders. The firm recently acquired the wealth arm of C. Hoare & Co in London and it is believed that under the new leadership of former Credit Suisse banker Simon Lints growth in Asia through a suitable acquisition is on the table and supported by Cazenove Chief Executive Andrew Ross in London.

 

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