Photographer: Nicky Loh/Bloomberg

OCBC to Purchase National Australia Bank Asian Wealth Units

  • Singapore-based bank is expanding wealth management operation
  • National Australia is pulling back from overseas operations

Oversea-Chinese Banking Corp. agreed to buy National Australia Bank Ltd.’s wealth management business in Singapore and Hong Kong, in the latest move by a Singapore lender to bolster operations serving Asia’s rich.

OCBC said the business it’s buying is made up of a mortgage portfolio of about $1.7 billion and deposits of some $3.05 billion, according to a stock exchange filing Thursday. The purchase price will be determined based on the book value of the operation at the time the transaction is completed, the filing said.

OCBC has been building up its wealth business, turning its unit Bank of Singapore into one of the 10 largest private banks in Asia, according to the 2016 league table published by Asian Private Banker. Higher income from servicing Asia’s more well-heeled individuals helped DBS Group Holdings Ltd., United Overseas Bank Ltd. and OCBC offset bad-loan provisions and weaker loan margins to post better-than-expected first quarter profits.

Last year, OCBC purchased Barclays Plc’s wealth units in Hong Kong and Singapore.

NAB Pullback

NAB, in contrast, has been pulling back from its overseas operations, spinning off U.K.-based Clydesdale Bank last year. The Melbourne-based lender said the sale of the business, which serves private wealth clients in Singapore and Hong Kong, would allow it to focus on Asian corporate, business and institutional customers.

The addition of NAB’s loans will increase OCBC’s mortgage portfolio by about 4 percent and the lender will also gain access to about 11,000 new customers, the Singapore bank’s statement said. The purchase price of the NAB assets won’t involve any premium to book value, OCBC said.

The transaction is expected to be completed before the end of the year, subject to regulatory approval, and the business will be positive for the bank’s earnings within a year, OCBC said.

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