Oversea-Chinese Banking Corp. (O39.SG) said it would buy National Australia Bank Ltd.'s (NAB.AU) private wealth business in Singapore and Hong Kong.
"The purchase consideration will be at around the book value, or net asset value, of the business at the time of completion," OCBC said in a statement. The deal is expected to be completed before the end of the year and will be accretive to earnings.
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The deal comes as banks in Singapore seek to beef up their sources of income as a subdued loan-demand outlook weighs on overall earnings growth expectations.
The private wealth business is made up of a mortgage portfolio, amounting to about US$1.7 billion worth of mainly residential mortgage loans, and a deposit portfolio made up of about US$3.05 billion worth of deposits as of the end of February.
The business serves a total of about 11,000 customers across the two markets.
OCBC said the addition of mortgage loans will increase the overall size of its mortgage portfolio by about 4% based on its mortgage-loan book of S$60 billion as at end March 2017.
Write to Saurabh Chaturvedi at firstname.lastname@example.org
(END) Dow Jones Newswires
May 10, 2017 23:31 ET (03:31 GMT)