Private Banking

OCBC buys NAB’s wealth units in Hong Kong and Singapore

The sale affecting 4,000 Hong Kong clients, comes as NAB looks to focus on corporate and institutional customers

PUBLISHED : Thursday, 11 May, 2017, 7:21pm
UPDATED : Thursday, 11 May, 2017, 10:23pm

Singapore’s OCBC has agreed to acquire National Australia Bank’s private wealth assets in Hong Kong and Singapore, the latest move of Singaporean banks’ ongoing efforts to grow their wealth management businesses, according to an announcement by the banks on Thursday.

Loans booked in Hong Kong accounted for more than half of the US$1.7 billion mortgage book that OCBC has acquired from NAB. But in all, the Singapore bank has gained around 4,000 clients in Hong Kong in both the mortgage business and the deposit portfolio. The latter is worth over US$3 billion across the two markets.

The deposits and mortgages booked in Hong Kong will be transferred to OCBC’s Hong Kong subsidiary, OCBC Wing Hang.

“The addition of the mortgage portfolio not only augments our existing loans book for local property financing, but also serves as a good base for financing customers who have interest in acquiring properties overseas,” said Mr Na Wu Beng, Chief Executive Officer, OCBC Wing Hang Bank.

More than half the properties financed by the mortgages are in Australia.

The purchase price of the business has not been fixed and will depend on the net asset value of the business at the time the transaction is completed.

The addition of the mortgage portfolio not only augments our existing loans book for local property financing, but also serves as a good base for financing customers who have interest in acquiring properties overseas
Na Wu Beng, OCBC

OCBC has been growing its private banking business steadily in recent years, and its wealth unit, Bank of Singapore was the seventh-largest in Asia-Pacific at the end of 2016, according to data from Asian Private Banker magazine, following its acquisition of Barclays’ wealth unit early in 2016.

As of March 2017, Bank of Singapore had US$85 billion of assets under management.

The changing shape of Asia’s private banking sector

OCBC is not the first Singaporean bank to acquire the wealth business of an Australian bank. Last year, DBS acquired ANZ’s wealth management and retail business in five Asian markets including Hong Kong.

Recent years have been turbulent for banks’ wealth management operations with a number of mid-sized players, including ABN AMRO, Coutts and Societe Generale, deciding to sell their wealth units. Analysts cited increased costs particularly due to regulatory burdens, and the impact of technology as reasons for the withdrawals, as banks attempt to focus their capital on areas where they can perform best.

NAB executive general manager for international branches, Peter Coad, said the sale simplified NAB’s Asian business so that it can focus on better serving its business, corporate and institutional customers.

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