SINGAPORE: Singapore’s Overseas-Chinese Banking Corp said on Thursday it will acquire National Australia Bank’s private wealth business in Singapore and Hong Kong, increasing its mortgage portfolio by around 4%.
The city-state’s second-biggest lender didn’t disclose the size of the deal, only saying the amount would be around the book value of the business at the time of completion. The deal will add 11,000 customers and US$1.7 billion worth of business to OCBC’s mortgage portfolio.
Singapore banks have been expanding their wealth management operations in recent years, chipping away at market shares of global players, as they struggle with their exposure to the stressed oil and gas services sector.
National Australia Bank was not immediately available for comment.
“(NAB’s) broader strategy is to focus on Australia and New Zealand – it doesn’t surprise me they’re selling off in Singapore and Hong Kong,” Morningstar analyst David Ellis said.
NAB last year announced a management shake-up and a renewed focus on local businesses.
It spun off its struggling UK operations and withdrew from underperforming businesses in the United States. It also sold 80 percent of its life insurance business to Japan’s Nippon Life for A$2.4 billion last October.
Other Australian banks have also retreated from their overseas businesses.
Australia and New Zealand Banking Group last year agreed to sell its wealth and retail businesses in five Asian markets to Singapore’s biggest lender, DBS Group Holdings Ltd, for around S$110 million.