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OCBC to buy National Australia Bank’s private wealth business in Singapore, Hong Kong

OCBC Bank to acquire National Australia Bank's private wealth business here and in Hong Kong


OCBC Bank has agreed to acquire National Australia Bank's (NAB) private wealth business in Singapore and Hong Kong, as it powers ahead in the race among regional banks for the highly lucrative wealth management market.

Last November, OCBC bought the wealth and investment management businesses run by Britain's Barclays Bank in Singapore and Hong Kong for US$227.5 million (S$321m).

Its latest acquisition comes with a mortgage portfolio worth about US$1.7 billion of mainly residential mortgages, and a deposit portfolio of about US$3.05 billion - a mix of currencies - as at Feb 28, said the bank yesterday.

The deal is set to be completed before the end of the year, subject to regulatory approval.

The final price has not been set but will be at the net asset value at the time the deal is completed.

The businesses serve about 11,000 customers across the two markets - more than 7,000 in Singapore and about 4,000 in Hong Kong. They are primarily affluent customers.

OCBC's chief operating officer Ching Wei Hong noted in a statement: "A mortgage loans book of more than $2 billion is not small. It would have taken us time and money to grow our mortgage loans organically by that amount."

More than half of the properties are in major cities in Australia such as Sydney and Melbourne, and come with a weighted average loan-to-valuation ratio of below 60 per cent.

The portfolio has negligible delinquencies, reflecting the high credit quality among the affluent customers. Mr Ching said the bank can "extend additional banking services" to these customers.

The move continues a consolidation trend in Asia. For instance, DBS Bank said late last year it was buying ANZ's businesses in Singapore, mainland China, Hong Kong, Taiwan and Indonesia for about $110m.

Wealth management has given local banks a boost in recent years, as they grow assets under management (AUM) and fee income.

Mr He Yuxuan, an analyst at Daiwa SB Investments (Singapore), said: "With more banks seeking to focus on their domestic businesses - selling off overseas operations - we may see more of such opportunities for Singapore banks to... also cross-sell their products and services."

Indeed OCBC chief executive Samuel Tsien is focused on such opportunities. On Tuesday, he said the bank will continue to grow in wealth management "organically, and should there be opportunities that fit into our culture, then we will look at those".

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