The Oversea-Chinese Banking Corp, Singapore’s second largest lender, today unveiled a private banking business that will target wealthy individuals in Indonesia, as it continues to expand its operations across Asia.
As reported, less than two weeks ago it announced that it was to buy National Australia Bank’s wealth management businesses in Singapore and Hong Kong, and last April, OCBC Bank said its wholly-owned private banking subsidiary, Bank of Singapore, would acquire the wealth and investment management business of Barclays in Singapore. announced it
The new onshore private banking service in Indonesia will be run by OCBC NISP, a Jakarta-based banking entity that is 85% owned by OCBC, and will target high-net-worth Indonesian individuals as well as business owners, SMEs and large corporations”, according to a statement on the OCBC NISP website.
It said the advantages of the new operation would include “the integration of various solutions, both in terms of product and services, banking and non-banking, that will be offered to clients in Indonesia and abroad”.
According to Capgemini’s 2016 Asia Pacific Wealth Report, an estimated 48,000 high-net-worth individuals live in Indonesia, with total assets of around US$161 bn.
The announcement comes just weeks after Indonesia’s tax amnesty programme came to an end. As expected, much of the Indonesian wealth that surfaced during that amnesty had been sitting in Singaporean banks and financial institutions – 73% of total assets declared and 57% of assets repatriated back to Indonesia, according to one media report.
It also coincides with a departure from a number of Asian markets of such European and non-Asia-headquartered banks and financial services entities, including Barclays, Citigroup, Australia & New Zealand Banking Group, Societe Generali and Edmond de Rothschild (Suisse) SA, although some, such as Credit Suisse, continue to expand in the region.
‘Background to the launch’
In announcing the launch of what is being called “OCBC NISP Private Banking”, OCBC NISP cited as “background” the dawn of “the era of transparency since 2016”, which it noted “has greatly affected the financial world”, coupled with a recent upgrading in the country’s credit rating “that will allow new foreign investment funds to enter Indonesia, thus strengthening the exchange rate and lowering Indonesia’s cost of funds”.
“These things became a game-changer for all the parties concerned – the investors, the customers of the funds, the entire financial industry, and of course, the regulator/government,” it added.