OCBC to buy Barclay's wealth and investment management businesses in Singapore, Hong Kong

OCBC Bank’s private banking subsidiary, Bank of Singapore, marked its acquisition of Barclays wealth and investment management business in Singapore and Hong Kong with a signing ceremony at OCBC Centre.
OCBC Bank’s private banking subsidiary, Bank of Singapore, marked its acquisition of Barclays wealth and investment management business in Singapore and Hong Kong with a signing ceremony at OCBC Centre.PHOTO: OCBC

SINGAPORE - OCBC is acquiring British bank Barclay's wealth and investment management (WIM) businesses in Singapore and Hong Kong for US$320 million (S$430.85 million).

Its private banking subsidiary, Bank of Singapore, entered into an agreement to acquire the businesses, OCBC announced on Thursday morning (April 7).

OCBC beat DBS Group Holdings, the other bidder left in the race, sources with told Reuters, after a competitive bidding process that saw several Asian and European bidders taking interest in the initial round.

With the addition of the Barclays wealth and investment management unit in Singapore and Hong Kong, OCBC's Bank of Singapore unit will see its assets under management rise by about 33 per cent to US$73.3 billion.

"The acquisition of Barclays WIM Singapore and Hong Kong furthers OCBC Bank's strategic goal of deepening its presence in its four core markets - Singapore, Malaysia, Indonesia and Greater China - and particularly expands its wealth management business," the bank said on Wednesday.

"At the same time, it strengthens Bank of Singapore's position as Asia's global private bank and enhances value for Barclays WIM Singapore and Hong Kong clients."

OCBC said Bank of Singapore has sufficient financial resources, through its own internal cash, to fund the acquisition.

The purchase price was set at 1.75 per cent of Barclays WIM Singapore and Hong Kong's assets under management (AUM) that will be transferred to Bank of Singapore upon the completion of the transaction.

Based on Barclays WIM Singapore and Hong Kong's AUM of US$18.3 billion at Dec 31, 2015, the indicative purchase price is US$320 million.

The acquisition is expected to be accretive to OCBC Bank's earnings per share and return on equity after the first year.

The transaction will have minimal impact on OCBC Bank's capital position, which will remain robust following the completion of the transaction, it said.

The transaction is subject to approval of the Singapore High Court for the transfer of the Singapore business. It is expected to be completed towards the end of 2016.