NAB exit continues Asia’s PB consolidation

As of end-February, the business to be sold comprised a $1.7bn mortgage portfolio and a $3.05bn deposit portfolio, with around 11,000 customers across Hong Kong and Singapore, according to a statement from NAB.

The transaction is expected to be completed before the end of 2017 and will not have a material financial impact on NAB, the firm said.

The transition of customers is also expected to be completed at the same time, Neil Parekh, NAB general manager for Asia ex-Greater China, said in the statement.

The sale of NAB’s private wealth business will simplify the bank’s operations so it can focus on its business, corporate and institutional customers, Peter Coad, NAB’s executive general manager for international branches, said in the statement.

In the region, besides Hong Kong and Singapore, the firm has a private wealth business in Japan. It also has a presence in Jakarta that supports offshore trade, markets and institutional banking and in Mumbai for institutional and corporate, trade markets and personal banking. 

Bank of Singapore, OCBC’s private bank, has been active in acquiring private banking businesses and clients. In late-November, BoS announced that it has completed the acquisition of Barclay’s wealth and investment management business in Singapore and Hong Kong. 

Also in 2016, DZ Privatbank referred its clients to BoS as it shut down its branch in Singapore.

PB M&A spree

A number of banks have streamlined their operations by selling off Asia private and wealth management units.

In December 2016, Edmond de Rothschild (Suisse) announced the closing of its Hong Kong branch. 

Days before EdR’s announcement, Dutch bank ABN Amro sold its private banking operations in Hong Kong, Singapore and Dubai, totalling $20bn in AUM, to LGT. 

ANZ sold its Asian wealth management and retail units for a loss to DBS in October 2016. Two years earlier, Singapore-based DBS, the largest bank in Southeast Asia, also bought the private banking activities of Societe Generale in Singapore and Hong Kong.

In April 2016, Union Bancaire Privée (UBP) closed the acquisition of Coutts’ wealth management operations in Hong Kong and Singapore, which brought $9bn to the bank’s platform. 

UBP’s private banking Asia CEO Michael Blake told FSA in a previous interview that he believes that the consolidation trend will continue. 

“The industry is at an inflection point where it is necessary for banks to demonstrate commitment to the region and be clear about core strengths. We are already seeing much greater differentiation within the industry, with universal, regional and boutique banks offering a more distinct proposition to clients.

“Private banks that are in the `squeezed middle’ — those for whom wealth management is a small or non-strategic part of their overall business — will remain under pressure as financial institutions refocus on core business lines and markets,” Blake added.