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Posts Tagged ‘ING’

Around Asean: recent financial news

In Indonesia, Malaysia on 14/10/2012 at 6:51 am

Shares in the London-listed Indonesian coal miner Bumi rise sharply for a second day after a proposal from Indonesia’s powerful Bakrie family to split from the firm. The dynastic Indonesian Bakrie family has proposed a split from Bumi that they helped to create with the British financier Nathaniel Rothschild. Wonder what the guy who bot at 11 thinks?

A.I.A. to pay US$1.7bn for ING’s Malaysia business. A.I.A. said the acquisition will catapult it to the No. 1 position in Malaysia’s lucrative life insurance market. For the Dutch insurer ING, it is the first major deal in its plan to divest its Asian assets.

The founders of Malaysia’s AirAsia, Tony Fernandes and Kamarudin Meranun, are set to launch three IPOs in 2013 worth more than US$500 million (S$614 million).

Tune Group, a financial services-to-discount hotel conglomerate owned by Fernandes and Kamarudin, is expected to launch US$65 million IPO of its insurance arm, Tune Insurance, not later than the first quarter of 2013, according to two sources with direct knowledge of the deal.

Meanwhile, AirAsia’s long-haul arm, AirAsia X, recently hired CIMB, Malayan Banking Bhd and Credit Suisse Group for a US$250 million IPO expected early next year.

The group is looking to list its Indonesia operations, Indonesia AirAsia, by the first quarter of next year in a deal that could raise up to US$200 million.

The listing plans also come at a time when Fernandes is stepping down as the chief executive officer of the Malaysian-listed airline to focus on regional growth through Indonesia. The group’s plan to buy up to 100 Airbus jets, potentially worth about US$9 billion, is designed to fuel the growth of what is becoming a cluster of related airlines under Fernandes, who placed a record order for Airbus jets last year.

With an operating fleet of more than 116 aircraft, AirAsia has ordered a total of 375 Airbus jets as part of dramatic expansion plans that include the acquisition of Indonesia’s Batavia Air.

DBS Group, South-east Asia’s largest lender, is selling more than half of its 20.3% stake in The Bank of Philippine Islands (BPI) to conglomerate Ayala Corp for 25.6 billion pesos (S$757.3 million). “With the divestment of a 10.4 per cent interest in BPI, DBS will hold an aggregate 9.9 per cent investment in the bank. DBS will continue to have representation on the BPI board.”.

DBS, which has been a strategic investor in BPI since 1999, would realise a gain of about S$450m against the carrying value of the investment.

Ayala is the biggest shareholder in BPI, the Philippines’ largest bank by market capitalisation.

DBS is selling the stake at a time when the Philippines stock market is among the best performing markets in South-east Asia. The Philippines main index has gained some 23% this year, with BPI 42%.

Nice little profit in a rising market. Can’t blame DBS for not trusting the bullishness that the Philippines has got its act together finally.  It’s cyclical, juz like another peace treaty signed with Muslim rebels in the South.

Japan intends to start lending Burma money aiming to help transform Burma into a production and investment hub to rival Vietnam.  “Japan’s big trading companies are at the forefront of the investment effort. Mitsubishi, Marubeni and Sumitomo have signed an agreement with the Myanmar government to develop the initial phase of Thilawa, a 2,400-hectare site close to the southern port of Yangon, which will feature housing, commercial space and an industrial park,” reports FT

Selling an insurance biz is not easy

In Insurance on 08/08/2012 at 6:16 am

In fact sounds harder than flogging life insurance. ING’s attempts is case in point.

ING may break up its Asian life insurance operations and is holding talks with buyers interested in the business in different countries.

The company is currently in discussions with Manulife Financial and AIA Group Ltd or the Southeast Asian operations, and with both firms as well as KB Financial Group Inc for those in South Korea.

ING is also in talks with a consortium led by Mark Wilson, the former head of AIA. Backed by Blackstone and Swiss Re. Wilson bid for the entire Asia business. m Richard Li, son of Hong Kong’s richest man, bid for ING’s operations in Southeast Asia and Japan.

Two private equity funds have bid for the Japanese operations.

Meanwhile UOB, among many others, are interested in ING’s fund mgt unit.

http://www.bloomberg.com/news/2012-07-31/ing-said-to-plan-breakup-of-asian-insurance-unit-in-sale.html

Another Ang Mog bank retreats from Thailand

In Banks on 25/03/2012 at 4:10 pm

HSBC recently put put up a “For Sale” on its retail banking network in Thailand.

Now ING is doing the same for its stake in a Thai bank. http://www.reuters.com/article/2012/03/23/us-ing-tmb-idUSBRE82M05520120323. ING has  put a US$775m price on its 31%  stake in TMB. It .bought the stake in Thailand’s seventh-largest lender in 2007 for US$607m. Nice profit if it gets its asking price.

 

S’pore banks: Is private banking the future?

In Banks on 07/10/2011 at 9:18 am

It has been a regular complaint of mine that our three local banks have too much capital for their own good. See this and this.

This excessive capital requirement is the reason why OCBC paid such a high price for the Asian private banking business of ING and why DBS and UOB are trying harder to build up decent private banking businesses, despite repeatedly failing to do so in the past.

While private banking itself does not use up much capital, clients and prospects want to put their money in banks that have plenty of capital. A very high capital  base is a great comfort blanket. As is the conservative nature of a bank. OCBC and UOB have both and while DBS’s FTs are more cowboyish, they have been kept in check, so far.

OCBC’S private bank claims that it is attracting assets from the Singapore branches of French banks as the euro region’s debt crisis frightens their local clients. Defections from French banks helped generate net new money of about US$4 billion for Bank of Singapore this year, the CEO said recently.

Private banking looks like a good use of the local banks’ capital, given that their conservatism and regulatory requirements require them to hold excessive amounts of capital.

But they are late in the game where economies of scale matter. Example: OCBC’s private bank (the biggest by far of the three local banks) had US$29.6 billion of assets under management at the end of June, less than 9% of the total at BNP Paribas’s wealth management unit. And this French bank is not a serious player in the either the Asian or international private banking industry.

OCBC: Reward for avoiding balls-up?

In Corporate governance on 17/03/2010 at 5:52 am

OCBC Bank granted chairman Cheong Choong Kong more than 230,000 share options – the most he has received since being appointed chairman in July 2003.

Could this I wonder be for avoiding the investment mess-ups that happened at SIA when he was CEO? Make no mistake, he was a vv gd CEO: operationally. SIA went from “strength to strength” as the cliché goes.

But during his tenure, there were two big investment mess-ups — buying into Virgin Atlantic at a very gd price for one Richard Branson (at a time when he needed money) and Air NZ. Air NZ went bankrupt (mainly because of the crisis that hit the airline industry post 9/11) and it could have been worse. SIA wanted to increase its stake sometime before before 9/11 but was blocked by the NZ government because Air NZ was a “strategic asset”. While the Air NZ investment was only a peanuty S$403m, the 49% stake in Virgin cost £600m (US$960m).

But maybe OCBC shld have waited. The purchase of ING’s Asian private banking business could come to haunt OCBC. A few days before this deal was annced, ING sold its European biz, at a fraction of the multiple that it got for Asia. Only time will tell if the growth in Asian wealth and OCBC’s ability to grow the private banking biz will justify the hefty premium that OCBC paid.

It paid US$1.46bn which represents 5.8% of the unit’s assets under management, after adjusting for surplus capital of US$550m. This compares with the 2.3% measure paid by Julius Baer for ING’s Swiss assets which is in line with another European purchase by an American private equity group of a smallish private banking outfit — RHJI’s purchase of Kleinworth Benson from Commerzbank.

But to be fair to OCBC and its chairman, HSBC is rumoured to have also bid US$1.46bn but was unwilling to give an assurance that there would not be staff layoffs. OCBC was willing.

Update 22 April 2010

The media have reported that OCBC’s inhouse prvate banking team is unhappy, with resignations etc being made.

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