Oversea-Chinese Banking Corp. (O39.SG) Thursday said that it will buy the Asian private banking assets of ING Groep NV (ING) for US$1.46 billion, in a deal that would propel it to become one of the top 10 private banks in Asia.

OCBC said that its private banking assets would more than triple following the deal with ING bringing the Singaporean bank's total assets under management to US$23 billion.

"We are not letting the (global economic) crisis go to waste...we are doing a transformational acquisition for OCBC," the bank's chief executive, David Conner, said at a news conference.

"The purchase will be funded by OCBC Bank's existing resources," the bank said, adding that its capital position will remain strong.

It said that its Tier-1 capital will fall by about 1.5 percentage points to 13.9%, but will remain well above the regulatory minimum requirement of 6%.

OCBC beat four rivals, including HSBC Holdings PLC (HBC). Fellow Singaporean bank DBS Holdings Ltd. (D05.SG) dropped out of the race early on, a person familiar with the situation said.

Conner said that the acquisition of ING's Asia private banking assets will put OCBC on a scale that is "fundamentally" needed to compete with other Asian private banking players.

"OCBC bank will be well placed to capture the opportunities provided by the rapid growth of Asia's wealth management industry and Singapore's unique position as a major private banking hub, attracting wealth from both within and outside Asia," the statement said.

JP Morgan advised ING on the sale, while Goldman Sachs Group Inc. (GS) acted on behalf of OCBC.

For ING, the deal is a further step toward freeing up capital in order to cut government ties after a financial lifeline last October, representing an estimated EUR300 million net profit and expected to release EUR370 million of capital.

CEO Jan Hommen said in a statement that the divestment program of ING's private banking business is now completed. "ING Private Banking in the Benelux and Central Eastern Europe remain integral parts of ING", he added.

Calamander Capital, a Singapore base boutique investment manager, said the deal would propel OCBC among the top 10 private banks in Asia Pacific in terms of assets under management.

Some analysts were skeptical about OCBC's move given its lack of exposure in the private banking business and some worry that the Singaporean bank may have overpaid for ING's assets.

"The challenge will be to retain the customers and the relationship managers because OCBC is not a brand name," said an analyst with a foreign bank.

"The main problem is will (OCBC) be able to keep the bankers and their clients? Private banking is all about the brand. It may raise doubts in clients minds if (ING's operations are) no longer seen as a Dutch bank," said another analyst with a European bank.

Both analysts also raised concerns that OCBC may be overpaying for ING's assets.

However, Conner said the bank has paid a "healthy price" for the assets.

"We are not embarrassed or in anyway surprised (by the price paid for ING assets)...It is a rare opportunity get to an acquisition like this in Asia," he said.

OCBC shares closed 1.0% lower at S$7.60. In comparison, the Singapore Straits Times Index finished the day flat at 2712.15 points.

Some analysts, however, were positive about the deal.

"As of June 2009, OCBC had tier-1 capital of S$15 billion, a tier-1 ratio of 15.4%, compared to tier-1 ratios of about 12.5% for its peers. This suggests that OCBC enjoys excess tier-1 capital of S$2.5 billion-S$3 billion over its peers, giving it ample ammunition to seek M&A opportunities," Robert Kong, analyst with Citigroup said in a note.

The note also said that adding private banking assets would enhance OCBC's leading wealth management franchise, that includes 87%-owned Great Eastern (life insurance) and 91% owned Lion Global Investors (asset management).

Conner said that given its capital position, OCBC still has the financial power for acquisitions, "if opportunities like this arise."

He also said OCBC doesn't plan to change the operational and business model of ING Asia's private banking, which will operate as a wholly-owned subsidiary of OCBC Bank after the transaction.

"OCBC is an ideal acquirer. We would not retrench anyone," Conner said.

He said OCBC has been given assurances by ING Asia's private banking management that they will continue to lead their teams.

ING is targeting EUR6 billion-EUR8 billion in asset sales to help pay down a EUR10 billion lifeline it received from the Dutch government last October to underpin its core capital.

Last week, Swiss wealth manager Julius Baer Holding AG said it would buy ING's Swiss private banking assets for US$505 million. Last month, ING sold a 51% stake in its Australia and New Zealand wealth management and life insurance joint venture to its partner, Australia & New Zealand Banking Group Ltd., for EUR1.1 billion.

-By P.R. Venkat and Amy Or, Dow Jones Newswires; 852-2832 2335; amy.or@dowjones.com; venkat.pr@dowjones.com

(Maarten Van Tartwijk in Amsterdam contributed to this article.)