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OCBC Bank to buy NAB's private wealth business in Singapore and Hong Kong

Singapore's OCBC Bank has agreed to buy National Australia Bank's private wealth business in Singapore and Hong Kong.12 May 2017

The purchase will give OCBC Bank access to around 11,000 new customers, US$1.7 billion worth of residential mortgage loans and around $3 billion in customer deposits in a mix of currencies, it said.

The purchase will increase the size of OCBC Bank's mortgage portfolio by around 4%, it said. The average loan-to-valuation ratio of the new properties is below 60%, and it has had a "strong track record with negligible delinquencies, reflecting its high credit quality and the affluent profile of the customers".

More than half of the properties are located in Australia, the majority of which are in the major cities of Sydney, Melbourne and Brisbane. Properties in the UK, Hong Kong, New Zealand and Singapore make up the rest of the mortgage portfolio, OCBC Bank said.

"Financing purchases of properties outside Singapore and Hong Kong is not new to OCBC Bank. It has established a robust risk management framework to manage its financing programme for overseas properties, which started with London properties in 2010. OCBC Bank has since expanded its overseas property financing programme to Australian cities such as Sydney, Melbourne and Perth, giving its customers a wide range of home loan solutions," the bank said.

More than half of the mortgage loans are booked in Hong Kong and these will be transferred to OCBC Bank’s wholly-owned subsidiary OCBC Wing Hang in Hong Kong, it said.

The customer deposits being acquired are in currencies including Australian, Hong Kong, Singapore and US dollars. Like the mortgage loans, the deposits booked in Hong Kong will be transferred to OCBC Wing Hang.