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Bank of Singapore to buy Malaysian fund manager

The OCBC subsidiary aims to address Malaysia's growing population of wealthy.

Pacific Mutual Fund, which manages fixed income, equity and Islamic funds in Malaysia, is 70% owned by OCBC subsidiary Lion Global Investors. Koperasi Angkatan Tentera Malaysia Berhad owns the remaining stake in PMF.

The transaction should allow the private bank to extend its presence in Malaysia, which is home to around 600 UHNWI (assets of $30m and above) according to the 2019 Knight Frank Wealth Report. To 2023, the number of UHNWIs is expected to grow 31% and the country’s 30,000 millionaires are expected to increase 27%.

Bank of Singapore (BOS) will pay cash for the acquisition, which is subject to approvals from the Monetary Authority of Singapore and Securities Commission Malaysia, the bank said in the announcement.

The net tangible asset value of PMF as at 31 December 2018 was approximately RM21.6m, according to the document.

BOS has been expanding in Asia, the Middle East and Europe. In April, it opened an office in Luxembourg to service its European clients who had previously been serviced from Singapore and London.

At the same time, OCBC already has personal and corporate banking operations in Malaysia.

The transaction involves mainly subsidiaries of OCBC. Upon the completion of the new transaction, PMF will become a wholly-owned subsidiary of BOS, which is itself a wholly-owned subsidiary of OCBC Bank. PMF’s majority owner Lion Global is also an OCBC subsidiary.

The deal is not expected to have any material impact on the net tangible assets or earnings per share of OCBC Group for the financial year ending 31 December 2019, according to the announcement.

BOS was created in 2010 following OCBC’s purchase of ING Asia Private Bank a year earlier in the wake of the global financial crisis. In 2016, BOS bought the wealth and investment management business of Barclays in Singapore and Hong Kong, acquiring $13bn of assets.

As of 31 December 2018, BOS’s total assets under management was $102bn, according to the bank’s website.

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