Sumitomo Trust & Banking Co.’s Nikko Asset Management Co. unit agreed to buy DBS Asset Management from DBS Group Holdings for $137 million to tap business from the expanding ranks of wealthy Asians.

Under the accord, DBS will also take a 7.25% stake in Nikko Asset and the combined firm’s managed assets will total more than $150 billion, the companies said in a joint statement filed to the Singapore stock exchange today.

Japanese banks are increasing investment in financial firms outside the country to counter slowing lending demand at home. The deal would help Sumitomo Trust increase asset management for Asians outside of Japan as the region’s wealth expansion outpaces the rest of the world.

 

“Asian riches are attracting Japanese lenders for future business growth,” Nana Otsuki, a Tokyo-based analyst at UBS AG, said before today’s announcement. “It’s a fee business, which Japanese lenders tend to prefer as it doesn’t require substantial risk taking.”

 

The number of millionaires in the Asia-Pacific region reached 3 million in 2009, matching those in Europe for the first time, according to a June report by Capgemini and Bank of America Corp.’s Merrill Lynch unit. Asian millionaires’ assets rose 31% to US$9.7 trillion ($12.6 trillion), the study showed.

 

Wealth in the region, excluding Japan, is likely to climb at almost double the global pace through 2014, the Boston Consulting Group said in June.