Societe Generale announced today that it has agreed to sell its Asia private bank to DBS, the Singapore-headquartered banking group.

Societe Generale announced today – as widely expected – that it has agreed to sell its Asia private bank to DBS, the Singapore-headquartered banking group.

The business, which oversaw $12.6 billion of assets at the end of last year, was sold for a $220 million cash sum to be received when the deal is complete, subject to an adjustment based on thenet asset value and assets under management at completion, tag|Societe Generale">Societe Generale said in a statement. The price tag comes at the lower end of a range that has been speculated on in the media leading up to today's announcement.

The Paris-listed banking group said it has also entered into a memorandum of understanding with DBS to develop a commercial partnership combining the strengths of the two franchises for the benefit of their respective clients.

The partnership will give Societe Generale’s clients access to DBS’ Private banking offering in Asia. In addition DBS’ clients will have access to Societe Generale Private Banking’s offering in Europe as well as to Corporate & Investment Banking solutions,” the statement said.

The transaction is subject to approvals from the relevant authorities and is expected to be completed in the fourth quarter of 2014. The deal is expected to have a positive impact on the French bank’s net income and on the Basel 3 Common Equity Tier 1 ratio.

In previous months, Societe Generale has steadfastly declined any comment about speculation it was planning a sale. Today's statement did not elaborate on the reasons the bank has decided to sell this part of a business that puts it in contrast to several European firms that are seeking to grab a share of Asia's rising affluence.

“Societe Generale remains committed to Asia, in particular in Corporate & Investment Banking, where it has successfully focused on its strengths over the past three years and reached a strong sustainable growth," the banksaid. The combined assets of the two entities will take DBS Private Bank up as high as sixth in the AuM rankings in the Asian region.

For months, there have been stories that Societe Generale was looking to sell the unit, but the bank has steadfastly declined to comment.

The Asian and global wealth management markets have seen a flurry of M&A activity in recent years, both as a result of the re-ordering of financial institutions after the 2008 financicrisis, as well as driven by rising regulatory costs - which require economies of scale to absorb - and the fact that some firms have not succeeded in achieving critical mass in some markets. OCBChas bought the private banking business in Asia from Netherlands-headquartered ING, to create Bank of Singapore; Bank of America has sold its non-US wealth arm to Julius Baer; Morgan Stanley has sold part of its non-US business to Credit Suisse. The BSI private banking business that is owned by Italy's Generali, and which has a presence in Asia, is reportedly up for sale.

In the case of Societe Generale, a sale of its Asian business follows the sale of its Japanese private bank in 2013; by contrast, it is boosting private banking operations in the UK and France.

A sale contrasts with the stance taken by rival French banking group BNP Paribas. When asked about the speculation about SocGen last year, BNP Paribas told this publication that while it had no comment to make about its French rival, it was committed to wealth management in Asia.

Among the details of today's M&A agreement is that DBS will take the Non-Resident Indian team from Societe Generale in Dubai; the French bank will keep the Arab and international team.