OCBC’s private banking unit, Bank of Singapore, announced today that it has completed the acquisition of the wealth and investment management (WIM) businesses of Barclays in Singapore and Hong Kong for a lower price than what was on the deal signed in April.
The purchase was priced at US$227.5 million (S$324.5 million), 29 % below estimation, after the amount of assets being transferred fell down. The final price is based on 1.75 per cent of the US$13 billion of Barclays assets transferred to OCBC’s private-banking arm, a filing to the Singapore Exchange stated.
The deal will surely help Bank of Singapore’s asset base to more than US$75 billion, allowing it to compete on a more equal footing in Asia with big players and rivals like DBS Group Holdings and UBS Group, Bloomberg reported. The increasing number of millionaires in the region has encouraged banks to expand their wealth businesses, allowing them offset the drag on interest income by lower interest rates globally.
As of April this year, Barclays’ WIM business has about US$17.5b AUMs, of which only US$13b was transferred to BoS. The bank’s CEO Bahren Shaari said the acquisition of a private bank with about 75% of the AUM transferred is a big success to the group. Bahren Shaari, chief executive officer of BoS said,
The Barclays team have shared with us that their clients are happy and convinced about the capabilities and competencies of Bank of Singapore. 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.
Singaporean Vikram Malhotra and Hong Kong-based Andrew Sum, two former senior Barclays employees, will join as members of the BoS management committee, and have come on board as global market heads. Shaari also said that the group has one of the largest teams of close to 400 experienced bankers to serve ultra-high net worth individuals and high net worth individuals in its core markets.