OCBC

[kennynah]

OCBC agrees to acquire ING Asia Private Banking for USD1.463 billion....

[winston]

US$16b in assets cost US$1.5b ?

OCBC to buy ING Asia private bank for $1.5 bln-sources

* Beats HSBC in the race, DBS dropped out earlier -sources
* Deal to be announced at noon - sources
* OCBC shrs up 0.8 pct before suspension pending announcement

By Clare Jim and Saeed Azhar

HONG KONG/SINGAPORE, Oct 15 - OCBC <OCBC.SI>, the smallest of Singapore's three local banks, has agreed to buy ING's <ING.AS> private banking unit in Asia for $1.5 billion, sources said on Thursday, a surprise outcome in a complex drawn-out auction.

OCBC beat HSBC <HSBA.L> to the deal, which could be transformational for it since its private bank is smaller than its Singapore rivals' and the wealth management business in Asia is relatively untapped. Singapore's biggest bank DBS <DBSM.SI> pulled out of the race for the ING asset a few weeks ago. "They had a very small private banking operation. What this would do is put the private bank on a firmer footing," Trevor Kalcic, banking analyst at RBS in Singapore, said of OCBC.

ING's sale of its Asian private bank with an estimated $16 billion in assets is its third major disposal in less than a month and the second in the Asia-Pacific region, as it seeks to raise capital to pay back bailout money to the Dutch government.

OCBC, which halted its shares pending an announcement that sources said was due around 0400 GMT, was the unexpected winner in a deal bankers earlier had said could be clinched by HSBC.

OCBC, which has not disclosed its private banking assets, lost a third of its bankers to foreign rivals in 2006. It also controls insurance firm Great Eastern <GELA.SI> and asset manager Lion Global Investors.

OCBC had surplus capital of S$15 billion , or a tier-1 ratio of 15.4 percent as of June, exceeding 12.5 percent for its peers, according to Citigroup analyst Robert Kong.

This suggests that OCBC enjoys excess tier-1 capital of S$2.5-3 billion over its peers, giving it ample ammunition to seek M&A opportunities, Kong said.

ASSET PRICES QUESTIONED

ING's private bank in Asia is run by Renato de Guzman, who has been instrumental in building the business in his home country Philippines and Indonesia. For a newsmaker on the banker click on [ID:nSP25815]

The sale of the Asian assets came after it struck a deal to sell its Swiss private banking unit to Julius Baer <BAER1.VX> for 344 million euros on Oct 7. For stories on Dutch financial sector turmoil, click on [ID:nL1574170]

ING is in the midst of raising 6 billion euros to 8 billion euros through asset sales under a restructuring program it announced in April. It plans to ultimately exit 10 of the 48 countries where it does business.

The restructuring follows 10 billion euros in state aid ING received in Oct. 2008 and a 22 billion euro asset guarantee it received from the Dutch state in Jan. 2009. [ID:nLH689463]

Both its restructuring plan and the asset guarantee are under review by the European Commission, though the asset guarantee in particular has received a frosty reception.

On Sept.15, the EU extended its review of the facility, saying it appeared the Dutch state may have paid too much for the assets and ING might have gotten an unfair deal. [ID:nLF346783]

That review is expected to be completed by the end of this year, European Competition Commissioner Neelie Kroes told the Dutch parliament on Oct. 13. [ID:nLD706728]

Analysts' worst-case scenarios envision a hit to ING of up to one billion euros if the portfolio is repriced -- enough to potentially push its core Tier I capital ratio below 7 percent.

The asset sale program is seen as one potential way to offset a capital hit, though analysts have been unhappy with the sales thus far. In particular, they have found fault with both the prices paid and the fact that ING is selling assets in a still-depressed market.

[winston]

Assets Under Management: US$16b
Management Fees: 1.5%
Revenue Per year: US$240m
Net Profits per year: US$80m

US$80m perpetuity at 5% = US$1.6b

So the US$1.5b is a fair price with no margin of safety ie. the AUM of US$16b will have to be around forever

[winston]

Not vested.

OCBC says Q3 net profit unexpectedly up 12 pct

SINGAPORE, Oct 28 (Reuters) - Singapore's OCBC reported on Wednesday an unexpected 12 percent rise in quarterly profit, helped by lower bad debt charges and trading gains that overcame writedowns on toxic debt linked to its insurance unit.

Oversea-Chinese Banking Corp (OCBC) clocked a net profit of S$450 million ($322 million) in July-September compared with S$402 million in the year-ago period.

Analysts had predicted a net profit of S$278 million, according to the average of six forecasts compiled by Reuters.

OCBC took a hit of S$213 million linked to its insurance unit Great Eastern , which in July decided to redeem its complex derivatives at a loss.

OCBC is set to overtake United Overseas Bank as Singapore's second-biggest bank after completion of its $1.5 billion purchase of ING's Asia private banking unit by the end of the year.

Its shares are up around 52 percent so far this year, in line with a similar rise in the benchmark stock index <.FTSTI>.

Source: Reuters

[LenaHuat]

IMHO this is a faulty investment. After this crisis, there is no 'loyal' private client. An extremely successful private banker (who obviously would be leading a pretty big team) will be ready to retire out to pasture so as to enjoy his hard-earned $$$. OCBC 'hopes' to reap the tail-end of a brilliant career??

[millionairemind]

October 28, 2009, 5.42 pm (Singapore time)

OCBC says non-performing loans may have peaked

SINGAPORE - OCBC, Singapore's third biggest lender, said on Wednesday that non-performing loans (NPL) may have peaked, after its third quarter earnings were helped by a drop in bad debts.

'Touch-wood, it looks like NPLs have peaked,' said CEO David Conner at a post-results briefing.

OCBC reported earlier on Wednesday an unexpected 12 per cent rise in quarterly profit, helped by the lower bad debt charges and trading gains that overcame writedowns on toxic debt linked to its insurance unit.

OCBC's bad debt charges dropped to $52 million (US$37.20 million) in the third-quarter from $156 million a year earlier, and also below the $104 million recorded in the second quarter. -- REUTERS

[iam802]

OCBC chart does not look quite right to me.

Quite a fair bit of selling.

2010Jan-OCBC Bk-800x600.png

[iam802]

Very narrow range. Watch which side it will breakout.

2010Jan-OCBC Bk-800x600.png

[iam802]

I believe, OCBC will continue to close lower today.

Support should be broken by now. If this continue, this little retracement will become a SELL signal.

Take care.

[iam802]

OCBC just had a bearish cross today.

Confirmation with Tenkan sen – Kijun sen crossing each other.

The Chikou Span has also start to cut the price line on the way down.