While the business transfer agreement has been signed, the completion of the deal is planned for the second half of the year and is subject to regulatory approval, according to a joint statement from the firms.
Nordea’s private banking business globally managed €13bn ($16.09bn) in assets at the end of 2017.
The decision came after a strategic review of Nordea’s private banking international activities. The review was part of the transformation of Nordea, with the aim to better manage risk, focus the business and deliver an “even better bank” to the clients, the statement said.
“We believe that with UBS, we found a reliable partner for our clients, who will meet their individual needs and requirements with the highest possible quality and professionalism,” Snorre Storset, Nordea’s head of wealth management, said in the statement.
Nordea Asset Management also has an on-the-ground presence in Singapore, according to a Nordea AM spokeswoman. “The continuity of our Singapore [asset management] operations will remain unchanged and our local team in Singapore will continue to service our clients as usual.”
Asia PB M&A
The acquisition includes the Nordea private banking operations in Singapore, which are relatively small with around 12 employees versus the 455 staff in Luxembourg and 30 in Switzerland as of the end of 2016, according to the bank’s annual report.
The Singapore unit’s profit before tax for the full year 2016, the latest annual figures available, was a loss of €2.21m, while the Luxembourg headquarters had a profit of €224.56m, according to the report.
A number of banks in Asia have streamlined their operations during the past year by selling off wealth management units. The shakeout has been attributed to difficulty in attracting new clients, the need for scale and regulatory costs.
The latest activity on the M&A front is Indosuez Wealth Management’s acquisition of the private banking division of Credit Industriel et Commercial (CIC). In December, CIC became a full subsidiary of Indosuez, the wealth brand of Crédit Agricole.
Other acquisitions and consolidations within the private banking and wealth management space include National Australia Bank’s sale of its private wealth business in Hong Kong and Singapore to OCBC and LGT Group acquiring ABN Amro’s private banking business in Asia.
