Barclays Wealth Units Priced Below Estimate in Sale to OCBC

  • Amount of $227.5 million is 29% below indicative price
  • Bank of Singapore assets rise to more than $75 billion

Oversea-Chinese Banking Corp.’s purchase of Barclays Plc’s wealth-management units in Singapore and Hong Kong was priced at $227.5 million, 29 percent below an initial estimate, after the amount of assets being transferred fell.

The final price is based on 1.75 percent of the $13 billion of Barclays assets transferred to Bank of Singapore, OCBC’s private-banking arm, the Singaporean lender said Monday in an exchange filing. OCBC had given an indicative price of $320 million in April when it announced the deal, based on the Barclays units’ end-2015 assets of $18.3 billion.

There were Barclays clients who chose to maintain relationships with a European private bank to diversify their holdings, Bank of Singapore Chief Executive Officer Bahren Shaari said in an e-mail, without giving further details. There were also customers who already had existing relationships with Bank of Singapore and didn’t wish to have funds concentrated in one bank, he said.

The deal will enlarge Bank of Singapore’s asset base to more than $75 billion, allowing it to compete on a more equal footing in Asia with larger rivals including DBS Group Holdings Ltd. and UBS Group AG. The increasing number of millionaires in the region has encouraged banks to expand their wealth businesses, helping them make up for the drag on lending income by lower interest rates globally.

Opportune Time

“This acquisition comes at an opportune time as the Asia Pacific excluding Japan is expected to overtake Western Europe to be the second wealthiest region in 2017,” Shaari said in the filing, citing Boston Consulting Group data.

Bank of Singapore will take in more than 60 relationship managers from Barclays, bringing its total to about 400, according to the filing. OCBC had said in April that the Barclays businesses had 88 managers.

Bloomberg reported last month that more than 10 Barclays relationship managers in Hong Kong were joining Standard Chartered Plc, according to people familiar with the matter. Standard Chartered hired Didier Von Daeniken, Barclays’s former Asia-Pacific, Middle East and Africa wealth chief, as its global private-banking head in March.

Two former senior Barclays employees, Vikram Malhotra and Andrew Sum, have joined Bank of Singapore as global market heads and members of its management committee, according to OCBC’s statement.

OCBC shares gained 1.6 percent to S$9.03 as of 10 a.m. local time, taking this year’s gains to 2.6 percent.

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