OCBC to nab Barclays’ Singapore, Hong Kong wealth business for $431.6m

Bank of Singapore’s AUM will shoot up 33.3%.

OCBC’s private banking unit, Bank of Singapore, is proposing to acquire Barclays’ Wealth and Investment Management Business (WIM) in Singapore and Hong Kong to the tune of US$320m, or roughly $431.6m.

According to a report by OCBC, the price is based on Barclays WIM Singapore and Hong Kong’s assets under management (AUM) of US$18.3b (about $24.7b) as at 31 December 2015.

With the acquisition, it will take Bank of Singapore’s AUM to a total of US$73.3b (about $98.9b), or an increase of 33.3%.

The final purchase will be 1.75% of the AUM transferred upon completion of the transaction, which is seen to happen at the end of this year.

This acquisition will complement OCBC’s current wealth management business, especially in its key market in Hong Kong and Singapore.

“Based on Bloomberg, there are currently 16 Buys, 5 Holds and 3 Sells for the stock with a 12-month target price of S$9.33. The stock closed at S$8.72 yesterday,” the report notes.