Indonesia-based OCBC NISP, OCBC Bank’s 85% owned subsidiary, obtained regulatory approval to establish a private banking unit to manage the wealth of Indonesians with AUM of more than $1m, according to a statement from the bank.
In Indonesia, there are around 48,000 high-net-worth individuals with total wealth of $161bn, according to the statement, citing data from Capgemini’s 2016 Asia-Pacific wealth report.
The private banking unit, OCBC NISP Private Banking, will leverage OCBC Bank’s wealth management platform, which includes products from the bank’s subsidiaries: insurance products from Greater Eastern Holdings, equity and bond fund products from Lion Global Investors, brokerage securities from OCBC Securities and private banking services from Bank of Singapore, according to the statement.
The firm is expected to introduce more sophisticated solutions for its clients’ wealth planning and investment needs as its business grows, Parwati Surjaudaja, OCBC NISP’s president director, said in the statement.
“There are many new opportunities in the high-net-worth segment for the local Indonesian banks as a result of the successful completion of the government’s tax amnesty programme,” Sarjaudaja said.
The amnesty, which lasted from July 2016 to March 2017, provided an incentive for Indonesians to repatriate money held abroad without penalty. At least 745,000 taxpayers have declared more than $330bn of assets as part of the programme, Reuters reported in March.
OCBC NISP hired an industry veteran to lead the private banking unit, OCBC said, but did not name the individual. According to the bank, he has more than 20 years of experience in advising high-net-worth private clients, family offices and business owners in Southeast Asia.
In addition, the team also includes four other private bankers who have an average of 18 years of onshore and offshore private banking experience. The team is expected to double in size by the end of this year.
FSA sought more information from OCBC NISP, but the firm declined to disclose the names of the people it hired, noting that it will have an official announcement next month.
Asia build-out
OCBC’s expansion in Indonesia follows its announcement that it will acquire National Australia Bank’s private wealth business in Singapore and Hong Kong, as reported.
As of end-February, the business to be sold to OCBC comprised a $1.7bn mortgage portfolio and a $3.05bn deposit portfolio, with around 7,000 customers in Singapore and 4,000 in Hong Kong.
Bank of Singapore, OCBC’s private bank, has been active in acquiring private banking businesses and clients. In late-November, the bank 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.
