DBS will pay S$110 million ($79 million) above the book value of the businesses, which operate in Singapore, Hong Kong, China, Taiwan and Indonesia, the Singapore-based lender said in a stock exchange filing.
ANZ Bank said it will take a A$265 million ($201 million) loss on the deal, which marks a major step in Chief Executive Officer Shayne Elliott’s drive to unwind his predecessor’s expansion into Asia. The bank had previously been seeking to earn as much as 30 percent of profit from outside Australia and New Zealand by 2017.
“Our strategic priority is to create a simpler, better capitalized, better balanced bank focused on attractive areas where we can carve out winning positions” Elliott said in a statement to the stock exchange. ANZ will focus its resources in Asia on institutional banking, he said.
DBS is competing with larger international wealth managers including UBS Group AG and Credit Suisse Group AG, which are also expanding their wealth businesses in Asia. Earlier this year, DBS lost out to smaller competitor Oversea-Chinese Banking Corp. in buying Barclays Plc’s wealth and investment-management business in Asia.
Separately, DBS, Southeast Asia’s largest lender, said Monday net income was little changed at S$1.07 billion in the three months to September from a year earlier. That compares with the S$1.04 billion average forecast in a Bloomberg survey of six analysts.
The businesses being acquired have total deposits of S$17 billion, loans of S$11 billion and serve about 1.3 million customers, including 100,000 high net-worth individuals, DBS said.
DBS said the deal will be completed by early 2018.