UPDATE 2-OCBC's Q3 earnings, ING unit buy prime it for growth

* Net profit S$450 mln vs estimate of S$278 mln

* Shareholder says ING buy will increase its value

* OCBC says taking advantage of downturn to hike market
share

* Bad-debt charges drop to S$52 mln from S$156 mln yr-ago

* Shares gain almost 1 pct, up 52 pct this year
(Recasts with fresh fund manager quote)

By Saeed Azhar

SINGAPORE, Oct 28 (Reuters) - Singapore's OCBC (OCBC.SI),
armed with ING's Asian private bank buy and a surprise
quarterly profit rise, is embarking on a new growth strategy
targeted at the wealth business that is seen making the bank
more valuable.

The ING deal, which many analysts say is expensive, is set
to consolidate Oversea-Chinese Banking Corp as the No. 2 bank
in Singapore behind DBS Group (DBSM.SI) and pit it against
leading private banks in Asia such as UBS (UBSN.VX) and
Citigroup (C.N).

"Analysts seemed to have ignored the synergy value that ING
Asia private bank will bring to OCBC, focusing only on current
metrics such as price to book ratio," said Peter Elston, a
strategist at Aberdeen Asset Management Asia, which owns about
5 percent of OCBC.

"Sure, it will take time to integrate, but this acquisition
will eventually turn OCBC into a more rounded, and valuable,
bank."

Earlier this month, OCBC agreed to buy ING's (ING.AS) Asia
private bank unit for $1.5 billion in the biggest deal in the
wealth management industry since the onset of the global
financial crisis. [ID:nSIN503877]
OCBC also made its ambitions clear at its third-quarter
results, where it reported a 12 percent rise in profit, beating
market expectations of a 31 percent drop in profit.

"We are taking advantage of the economic downturn to further
strengthen our competitive position and add to our future
growth opportunities," CEO David Conner said in a statement.

BAD-DEBT CHARGES FALL

Singapore banks are slowing emerging out of the financial
crisis in a better shape, benefiting from improving loan demand
and fees as Asian economies recover and as investors show
increased appetite to trade stocks and bonds.

Analysts said they expected bad-debt charges to peak this
year, making 2010 a better year for Singapore bank earnings.

"This frees up a lot of room for credit costs to fall and
will be the key reason why 2010 estimated earnings will
surprise on the upside," said Kar Weng Loo, a banking analyst
for Bank of America's Merrill Lynch in a note to clients before
the earnings.

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.

The strong results came despit OCBC taking a hit of S$213
million linked to its insurance unit Great Eastern (GELA.SI),
which decided to redeem its complex derivatives at a loss.

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

Its shares were up almost 1 percent on Wednesday afternoon
and are up around 52 percent so far this year, in line with a
similar rise in the benchmark Singapore stock index .FTSTI.
(Editing by Muralikumar Anantharaman)