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A view of an Oversea-Chinese Banking Corporation (OCBC) signage at their premises in Singapore Reuters

Following the strong Q1 results coming from its wealth management segment, OCBC Bank has entered a deal to acquire National Australia Bank (NAB)'s private wealth business in Singapore and Hong Kong.

The deal is part of OCBC Bank's strategy of bolstering its wealth management business, which managed to end the first quarter of the year with a 50% growth to S$724m, contributing 32% to its overall revenues.

With the acquisition of NAB's private wealth business, OCBC will have an access to over 11,000 customers across Singapore and Hong Kong. OCBC Bank said in a statement that the deal will open up opportunities to deepen relationships with the affluent customers by leveraging its unique wealth management platform to provide an extensive range of wealth advisory, products and services.

Meanwhile, it will also be able to tap into NAB's mortgage portfolio amounting to about US$1.7b worth of mainly residential mortgage loans. This additional mortgage loans will boost OCBC's mortgage portfolio by 4%.

OCBC Bank Chief Operation Officer Ching Wei Hong said the mortgage portfolio to be transferred to the group is well-supported and of high quality.

"This deal makes financial and strategic sense to us. A mortgage loans book of more than S$2b 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," Ching said.

Meanwhile, NAB General Manager for Asia Neil Parekh noted that OCBC Bank is a perfect choice to sell their private wealth business to.

"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," Parekh stated.

The purchase consideration will be at around the net asset value of the business at the time of completion, which is scheduled before the end of the year.