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OCBC Bank to buy NAB’s private wealth business in Singapore and Hong Kong

BBR Staff Writer Published 12 May 2017

OCBC Bank has agreed to acquire National Australia Bank’s (NAB) private wealth business in Singapore and Hong Kong.

The acquisition amount to be paid by the Singapore-based bank has not been revealed. It will be at around the book value of the business during the closing of the deal.

As of February 2017, the private wealth business of NAB had $1.7bn worth mortgage portfolio. It comprises primarily residential mortgage loans along with a deposit portfolio made up of around $3.05bn.

By adding the mortgage loans of NAB business unit, OCBC Bank is set to increase its mortgage portfolio by nearly 4%, based on its mortgage loans book of S$60bn ($42.6bn) as of March end.

The private wealth business to be acquired by the Singapore bank boasts of having 11,000 customers across the two markets, mainly from the wealthy segment.

Its mortgage portfolio is said to be backed up strongly by a large pool of primarily residential assets with a weighted average loan-to-valuation ratio of less than 60%.

OCBC Bank chief operating officer Ching Wei Hong said: “This deal makes financial and strategic sense to us. A mortgage loans book of more than S$2bn ($1.4bn) is not small.

“It would have taken us time and money to grow our mortgage loans organically by that amount. We are now getting an immediate boost to our mortgage loans book.”

Over half of the properties are in Australia, with most of them located in Sydney, Melbourne and Brisbane. The remainder of the mortgage portfolio has properties in the UK, Hong Kong, Singapore and New Zealand.

National Australia Bank Asia (ex-Greater China) general manager Neil Parekh said: “We wanted a buyer that could meet our customers’ growing demand for a wide range of wealth management solutions in Asia. OCBC is uniquely qualified to do so.

“We will work closely with OCBC Bank during the transition to completion to ensure a smooth process for customers moving to a business with a comprehensive product offering and strong presence in Asia.”

The parties expect the transaction to be closed by the year end depending on regulatory approval.

Image: Main branch of OCBC Bank in Singapore. Photo: courtesy of Terence Ong/Wikipedia.org.