OCBC to buy HSBC Indonesia’s wealth, premier banking business in first major deal under new CEO.

OCBC Bank has struck a deal to acquire parts of HSBC’s wealth and premier banking portfolio in Indonesia, adding over 300,000 customers to its Indonesian subsidiary and potentially opening doors for Singapore-based staff seeking overseas exposure.

This marks the first major acquisition under OCBC’s new group chief executive, Mr Tan Teck Long, as the bank expands its presence in South-east Asia’s largest economy.

Announced on May 4, the deal involves OCBC taking over the assets and liabilities of HSBC’s International Wealth and Premier Banking (IWPB) operations in Indonesia – a portfolio covering customer deposits, mutual funds, bonds, insurance products, credit cards and retail loans.

The acquisition will add 336,000 customers and $6.6 billion in assets under management (AUM) to OCBC Indonesia, including $4.3 billion in customer investments in mutual funds, bonds and insurance, as well as $2.3 billion in deposits.

The deal will also bring about 1,300 HSBC Indonesia staff into the OCBC fold, expanding the bank’s wealth management talent pool.

An OCBC spokesperson said job opportunities in its Indonesia subsidiary will be made available to Singapore-based staff seeking overseas exposure.

The final price tag of the deal will be based on the net asset value of the business at closing, plus a premium of up to about $480 million.

OCBC said the purchase will be funded internally and is not expected to have a material impact on its net tangible assets, earnings per share and capital position.

Excluding one-off transaction costs, the deal is expected to increase the bank’s earnings per share when it is completed in the second quarter of 2027.

In its press release, OCBC said: “IWPB Indonesia’s customer base is highly complementary to the OCBC Indonesia franchise, giving it considerable scope to grow its wealth business.”

It added that the deal is expected to increase OCBC Indonesia’s AUM by about 25 per cent and boost its credit card balances by more than 150 per cent.

OCBC already operates in Indonesia through its Jakarta-listed subsidiary, PT Bank OCBC NISP.

Mr Tan said this acquisition fits well into the bank’s “next frontier” strategy. “It follows our successful 2024 acquisition and integration of PT Bank Commonwealth Indonesia, in further expanding our market penetration in South-east Asia’s largest economy,” he said, adding that Indonesia remains a key growth market.

OCBC’s shares closed 0.1 per cent or three cents lower at $21.87 on May 4 before the announcement.

Source: straitstimes