Oversea-Chinese Banking Corp. agreed to pay about $320 million for Barclays Plc’s wealth and investment-management operations in Asia, assets that had also drawn interest from its two major Singaporean competitors.
OCBC’s private banking unit Bank of Singapore will use its own cash to fund the purchase, the lender said in a statement Thursday. The price is indicative, based on Barclays’s current assets under management of $18.3 billion in Hong Kong and Singapore, OCBC said.
The acquisition will deepen OCBC’s presence in its core markets of Singapore, Malaysia, Indonesia and Greater China, it said. Asia’s growing wealth has attracted Swiss and U.S. banks to Singapore to seek greater market share in serving rich individuals. London-based Barclays, meanwhile, is shifting its focus to banking operations in the U.S. and its home market.
Assets under management at Bank of Singapore amounted to $55 billion at the end of last year, filings show. Following the acquisition, the figure will grow to $73.3 billion and the bank’s relationship managers will number 400, according to the statement.
That will also bring Bank of Singapore closer to DBS Group Holdings Ltd., Singapore’s largest wealth manager with private banking assets under management of $75 billion at the end of 2015, according to Asian Private Banker.
DBS and United Overseas Bank Ltd., the two other large Singapore banks, were also considering bidding for the Barclays operations, people familiar with the matter said earlier. DBS ranks sixth among all the largest private banks in Asia in terms of assets under management, according to Asian Private Banker, with UBS Group AG in the No. 1 spot.
The Singaporean banks have profited from using their wealth platforms for services such as distributing products for insurance companies and selling bonds to private-banking clients, collecting fees in the process. The companies also derive interest income from lending to wealthy customers.