Barclays has signed an agreement with Bank of Singapore Limited, the wholly-owned private banking subsidiary of Oversea-Chinese Banking Corporation Limited (OCBC) to sell its Wealth and Investment Management business in Singapore and Hong Kong.
While an attractive business with strong growth potential, this Barclays WIM business, serving high net worth and ultra high net worth clients in Singapore and Hong Kong, was confirmed as no longer central to Barclays’ strategy and became part of Barclays Non-Core in March 2016.
Jes Staley, Barclays Group CEO, said: “On 1 March I announced we would accelerate the rundown of Barclays Non-Core, which is key to creating a simpler, more focused core bank. The sale of our Wealth and Investment Management business in Singapore and Hong Kong marks further progress in our aggressive pursuit of Non-Core cost and risk weighted asset reductions.”
The purchase price will be 1.75% of Barclays WIM Singapore and Hong Kong’s assets under management (AUM1) at the completion of the transaction. Based on Barclays WIM Singapore and Hong Kong’s AUM of US$18.3bn2 at 31 December 2015, the indicative purchase price will be US$320m3. The current estimate is that the transaction will result in a pro forma decrease in risk weighted assets of approximately US$1.3bn4 at completion.
Clients of Barclays WIM in Singapore and Hong Kong will become clients of Bank of Singapore upon completion of the transaction. Transferring clients will then benefit from Bank of Singapore’s full product range that includes property and insurance financing, wealth planning, robust platform and advisory services as well as OCBC Bank’s extensive commercial banking capabilities in the region. Barclays remains committed to providing its clients with a full level of service until the transfer occurs.
Akshaya Bhargava, CEO, Barclays Wealth, Entrepreneurs and Business Banking said: “We believe that in Bank of Singapore and its parent OCBC Bank we have found a buyer that satisfies our core criteria of maintaining a consistent service for our clients and that has the scope to integrate and enhance the careers of our colleagues. Our priority is supporting all our impacted colleagues and clients throughout this transition. I want to take this opportunity to thank our colleagues in the business we are selling for their hard work and professionalism, which has built strong client relationships over many years and has made this business so attractive to OCBC Bank.”
Samuel Tsien, Group CEO of OCBC Bank, said: “We see attractive value in Barclays’ strong and complementary private banking client base in Singapore and Hong Kong, as well as its experienced and service-oriented wealth management team. We look forward to welcoming the clients and colleagues from Barclays’ Wealth and Investment Management business in Singapore and Hong Kong into the OCBC family. We will ensure that the integration is smooth and that Bank of Singapore supports the needs of its new clients with a more expanded suite of products and network. And, equally importantly, the enlarged platform will support the continued career development of our new colleagues.”
The transaction is targeted to close by the end of the year subject to court approval of a Singapore statutory scheme of transfer.
The transaction has no impact on our existing Corporate and Investment Banking businesses in Asia.