Oversea-Chinese Banking Corp., the owner of Singapore’s biggest life insurer, is close to an agreement to buy ING Groep NV’s private banking assets in Asia for about US$1.5 billion ($2.1 billion), said people with knowledge of the matter.

The companies may announce the deal as early as today, the two people said, declining to be identified because they aren’t authorised to discuss the matter publicly. ING spokeswoman Karen Williams and Oversea-Chinese spokeswoman Koh Ching Ching declined to comment.

Oversea-Chinese beat out HSBC Holdings Plc for ING’s Asian private bank, according to the people, as competition heats up in a region expected to outperform Europe and the US in wealth accumulation. Amsterdam-based ING last week sold its Geneva-based wealth management business to Julius Baer Group as it seeks to raise as much as 8 billion euros ($16.7 billion).

 

“Private banking assets are scarce and difficult to get hold of,” said Trevor Kalcic, the head of Southeast Asia equity research at Royal Bank of Scotland Plc. “For the private banking offering of OCBC, it would put it on a firmer footing to compete. OCBC can afford this relatively easily.”

 

Oversea-Chinese shares rose as much as 1% to $7.76 in Singapore morning trading before being halted pending an announcement. The stock has climbed 55% this year.

 

The company in August posted a better-than-estimated 9.6% gain in second-quarter net income on trading income and higher earnings from its insurance unit. Even so, fees from wealth management fell 64% from a year earlier to $29 million.

 

ING’s Asian private banking division is led by Renato de Guzman and manages assets for more than 5,000 clients from offices in Singapore, Hong Kong and the Philippines. Assets under management declined to 11 billion euros at the end of June from 11.4 billion euros three months earlier.

 

Hou Wey Foo, the division’s chief investment officer, was previously head of global equities at Lion Capital Management, the asset management arm of Oversea-Chinese.

 

The total wealth among millionaires in Asia Pacific will grow faster than the global average as the region’s economies outperform, according to a survey published this week by Cap Gemini SA and Merrill Lynch Wealth Management.

 

China’s number of so-called high net worth individuals, those with at least US$1 million of assets to invest, surpassed that of the U.K. last year to become the world’s fourth-highest, according to the 2009 World Wealth Report by the two firms.

 

ING, led by Chief Executive Officer Jan Hommen, is selling assets after receiving a 10 billion-euro lifeline last October. The company’s second-quarter net income slumped 96%, more than analysts estimated, as it set aside money for risky loans and reduced the value of its real-estate holdings.

 

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