Oversea-Chinese Banking Corporation (OCBC) has announced that its Indonesia subsidiary, PT Bank OCBC NISP Tbk (OCBC Indonesia), has on May 4 entered into an agreement with PT Bank HSBC Indonesia (HSBC Indonesia) to acquire the assets and liabilities of its retail banking and wealth management operations in Indonesia – International Wealth and Premier Banking (IWPB Indonesia).
The transaction involves the transfer of IWPB Indonesia’s assets and liabilities to OCBC Indonesia. The total AUM to be transferred is $6.6 billion, comprising $4.3 billion in customers’ investments in mutual funds and bonds as well as insurances, and customer deposits of $2.3 billion. The loan book of $0.3 billion will also be transferred.
Since the liabilities are more than the assets, the net asset value (NAV) is likely to be a negative number. OCBC will pay a premium of around $480 million, which is subject to the adjustment mechanisms in the agreement. The purchase consideration will be finalised after completion.
IWPB Indonesia is built around a premium, global financial service proposition serving retail and wealth customers offering a full suite of banking products and services and tailored wealth management. This portfolio comprising customer deposits, investment products covering bonds, mutual funds and insurance, credit cards and retail loans immediately deepens OCBC Indonesia’s wealth management business.
Excluding one‐off transaction costs, the transaction will be earnings accretive to OCBC after completion, which is expected in 2Q2027.
IWPB Indonesia is one of the largest foreign-owned retail banking and wealth management platforms in Indonesia and has consistently been recognised as a top-tier wealth manager in Indonesia. It serves 336,000 individuals across its 26 branches.
See also: DBS has ‘good shot’ of keeping profit close to 2025’s levels, says CFO
IWPB Indonesia’s customer base is highly complementary to the OCBC Indonesia franchise, says OCBC, giving it considerable scope to grow its wealth business.
Upon completion of the transaction, it is expected to increase OCBC Indonesia’s AUM by 25% and grow the credit card balances by more than 150%. The transaction will enhance OCBC Indonesia’s wealth management talent pool by adding about 1,300 staff.
“This acquisition in Indonesia fits well into our 'Next Frontier' strategy under the franchise shift of building up our Indonesia franchise. It follows our successful 2024 acquisition and integration of PT Bank Commonwealth Indonesia, in further expanding our market penetration in Southeast Asia's largest economy. Indonesia is a long-term commitment, and a key growth market,” says Tan Teck Long, group CEO, OCBC.
“The large deposits base of $2.3 billion with sizeable Casa balances is attractive in providing stable low-cost funding for our Indonesian franchise and significant opportunities for wealth management. We are excited about the scale and synergy that this high-quality portfolio brings to the group as OCBC, Bank of Singapore and Great Eastern come together to deliver the whole-of-wealth proposition.”
