The Australian bank has offloaded private wealth operations in Asia to OCBC, part of a seemingly relentless retreat by non-domestic players from the Asian wealth market.

National Australia Bank has agreed to sell its private wealth arm in Hong Kong and Singapore to OCBC, joining fellow Australia-based lender ANZ in offloading wealth operations in the region. The transaction also adds to OCBC’s purchase last year of private banking businesses in Asia from UK-listed Barclays.

“Business, corporate and institutional banking remains NAB’s focus in Asia,” NAB said in a statement today. 

The sale of the business will not have a “material financial impact” on NAB, it said. Financial terms of the transaction weren’t disclosed, by that bank. OCBC, which is parent of private bank Bank of Singapore, said: “The purchase consideration will be at around the book value, or net asset value, of the business at the time of completion. The consideration, arrived at on a willing buyer willing seller basis, takes into account OCBC Bank’s assessment of the value and potential of the business. The transaction, expected to be completed before the end of the year subject to regulatory approval, is not expected to have a material impact on OCBC Bank’s capital position. The business will be earnings accretive to OCBC Bank within the first year of completion.”

As at the end February 2017, the business to be sold comprised a $1.7 billion mortgage portfolio and a $3.05 billion deposit portfolio, with about 11,000 customers across Hong Kong and Singapore. 

“The sale simplifies NAB’s Asian business so that it can focus on better serving its business, corporate and institutional customers,” NAB executive general manager for international branches Peter Coad said.
“As Australia’s biggest business bank, NAB is focussed on helping our business customers in Australia and New Zealand access Asian markets, and on connecting Asian-based businesses to opportunities in Australia and New Zealand. The sale of our Private Wealth business, which is largely a retail business for Private Wealth clients in Hong Kong and Singapore, means our banking offer in Asia remains very focused on business, corporate and institutional customers,” he said.

The decision to sell this business puts NAB alongside ANZ, Barclays, Societe Generale and ABN AMRO in selling Asia wealth businesses to domestic Asian banks, a sign that such organisations have not delivered the kind of profits their parent groups might have expected. (To see an editorial commentary around this matter, see here.)

Neil Parekh, NAB general manager Asia (ex- Greater China) said the transition of customers is expected to complete by the end of the year, and work is underway to support NAB staff through this period of transition.

As reported elsewhere today, NAB, along with other big Australian lenders, is unhappy about a proposed bank tax being imposed by the country's government.