Interest in ING units cools as deadline nears

SINGAPORE/AMSTERDAM (Reuters) - A move by ING (ING.AS) to sell its Swiss and Asian private banking units may be losing momentum, with a number of potential bidders believed to be having second thoughts as the deadline for offers nears.

Final bids for the assets, expected to raise in the region of $1 billion, are due on Thursday, but the pool of interested parties is shrinking fast from an initial half a dozen or more when the sale process began several months ago.

Only two serious bidders remain, according to sources with knowledge of the deal, with one source saying there is a chance the Dutch financial services group may choose to sell only the Asian operations or scrap the deal altogether.

Switzerland's Julius Baer (BAER.VX) could bid for both units, while Singapore's DBS Group (DBSM.SI) is eyeing only the Asian unit, sources with knowledge of the deal told Reuters. Baer declined to comment.

Southeast Asia's largest bank declined to comment on its interest, though its priority was "to pursue organic growth opportunities which extend our Asia banking franchise," a spokeswoman said.

DBS might be attracted by ING's strong foothold in the Philippines -- where DBS has a small presence -- and Indonesia, said a person familiar with the deal.

One potential bidder, Barclays (BARC.L), has walked away from the sale, sources said, while Australia's ANZ (ANZ.AX) and Commonwealth Bank (CBA.AX) are no longer keen.

"We look at opportunities from time to time ... (but) not all opportunities in Asia are consistent with our strategy," an ANZ spokesman said. Commonwealth Bank declined to comment.

One dark horse is Credit Suisse (CSGN.VX), which showed initial interest in the Swiss unit. It is unclear if the Swiss bank will put in a bid, sources said.

The head of the bank's wealth management operations declined to comment on whether it would lodge a bid, but said it was interested in private banking activities that conformed with its business model.

KEEPING MUM

"There could be only two competitive bids," said one source aware of the deal. Once bids are lodged, ING could take another two weeks to decide on the result, he said.

The sale process is part of ING's drive to raise 6 billion to 8 billion euros from asset sales as it seeks to exit 10 of the 48 countries where it does business.

But since that disposal program was announced in April, news of how it is progressing has been thin on the ground.

ING has from time to time denied rumors -- for instance that it would sell India's ING Vysya Bank, or that it would exit Russia -- but has offered little else publicly.

Some of the silence may be rooted in ING's choices of assets to sell. The company says it knows what it would like to dispose of, but has also said some of the inquiries it has received have been for assets not on that list.

ING is also working against the perception that it could be conducting a fire sale, having received 10 billion euros from the state.

Banking sources familiar with the deal estimated the private banking businesses could sell for between 2 percent and 6 percent of the value of assets under management.

The units probably ended last year with around $35 billion under management, a figure that would have risen 20-30 percent since then, they said.

That would imply a sale price roughly around the $1 billion mark, though some analysts have called that estimate aggressive.

(Additional reporting by Kevin Lim, Lisa Jucca and Martin De Sa'Pinto in Zurich and Denny Thomas in Sydney; editing by John Stonestreet)