The Oversea-Chinese Banking Corporation (OCBC) acquisition of Barclays Wealth and Investment Management in Singapore and Hong Kong will close the gap with DBS, its main competitor in Singapore as well as provide the Singaporean banking group with a profile in Hong Kong's structured products market. OCBC, Southeast Asia's second-largest lender by assets, agreed to pay about $320m for Barclays Wealth Managment in Asia earlier this month to bolster Bank of Singapore, OCBS's private banking subsidiary.

One Hong Kong-based structured products banker said that the sales in the region are all to do with scale. "While banks like Credit Suisse, HSBC and UBS have large enough private bank subsidiaries to keep within their group, the recent sales are of wealth management arms that are too small to maintain," said the senior banker.

OCBC's acquisition follows a number of similar transactions in the region including Bank of America Merril Lynch's (Baml) sale of its private wealth unit to Julius Baer in 2012, Societe Generale's offloading of its private banking business in the region to DBS, and the sale of Coutts wealth management to Switzerland's Union Bancaire Privee (UBP) at the end of March.

Barclays has marketed 70 equity-linked notes (64) and hedged six open-ended structured funds for Celsius Funds in Hong Kong between 2007 and 2011, and 26 products in Singapore during the same period. OCBC Bank has marketed almost 200 structured investments in Singapore, China and Malaysia, of which 182 were issued in Singapore. The bank reported that wealth management income including equity-linked notes rose 6% to US$2.3bn in 2015. There are currently 27 live products issued by OCBC Bank in Singapore offering exposure to a number of assets including government bonds, interest rates, Sibor, managed funds and the JP Morgan DV Enhanced World Total Return (USD) Index. OCBC was the fourth most active structured products provider in Singapore in 2014, raising an estimated US$50m.

Bank of Singapore reported in its 2015 results that assets under management increased 7% to US$55bn (S$77bn) from US$51bn (S$67bn) a year ago. The group's wealth management income in the 2015 financial year, comprising income from insurance, private banking, asset management, stockbroking and other wealth management products, rose 6% to a new high of S$2.35bn, an increase from S$2.22bn a year ago. As a proportion of the group's total income, wealth management contributed 27%, as compared with 28% in FY14. The private bank also reported issuing S$1.2bn (US$883m) worth of structured notes (unsecured) in 2015.

OCBC has implemented a number of strategic acquisitions with private banking services offered by Bank of Singapore, life insurance by Great Eastern Holdings, asset management by Lion Global Investors, brokerage services by OCBC Securities, as well as other wealth management products and services offered by the bank.

OCBC acquired ING Asia Private Bank in 2010 and renamed it Bank of Singapore after combining it with its then private banking, and in 2014 acquired Hong Kong-based Wing Hang Bank, in a move to expand its Greater China business, which saw its net profit rise 19.2% in 2015.

Barclays Wealth Management Singapore and Hong Kong will provide OCBC a base of more than 1,800 clients, with total assets under management of US$18.3bn as at 31 December 2015, in two of OCBC Bank's core markets - Singapore and Greater China. Clients of Barclays Wealth Management in Singapore and Hong Kong will become clients of Bank of Singapore upon completion of the transaction.

This the latest non-core disposal from Barclays and follows the sale of its retail banking, wealth and investment management and part of its corporate banking business in Portugal to Spain's Bankinter for about €175m (£128m), and to CaixaBank (formerly La Caixa) in Spain. Other recent non-core disposals include the sale of its Barclays Risk Analytics and Index Solutions (Brais) to Bloomberg for approximately US$790m (£520m). Barclays also announced in December 2015 that it was exiting its Bmarkets business in Europe which operated in France, Italy, Germany and Switzerland.

Additional reporting by Richard Jory

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