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 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.

"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%.

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

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.

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.

OCBC offered the best package overall in pricing and how the assets would be managed and integrated into OCBC's existing private banking operations, another person familiar with the matter said. OCBC has pledged to take on all of ING's private banking staff in the region, he said.

"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 bank said in its statement.

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

Calamander Capital, a Singapore-based boutique investment manager said the deal would propel OCBC among the top 10 private banks in Asia Pacific in terms of assets under management from around 19th place previously.

Some analysts were skeptical about OCBC's move given its lack of exposure in the private banking business and some worried 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.

Others were more positive.

"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).

OCBC shares, which were suspended from trading ahead of the announcement, would resume trading at 0600 GMT.

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

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