Barclays Asia wealth division snapped up by OCBC for #320m to help it compete better with Singapore’s DBS
Barclays Asia wealth division had $18.3bn in assets under management at the end of 2015Reuters

Barclays, as part of its ongoing strategy to reduce global assets to focus on core businesses, has agreed to sell its Asia wealth business. The British bank's wealth and investment management business based in Singapore and Hong Kong will be sold to Oversea-Chinese Banking Corp (OCBC) for $320m (£227.62m, €281.04m).

Apart from OCBC, which is Singapore's second-biggest lender, DBS Bank, a Singaporean banking and financial services company had earlier shown interest in acquiring this division of Barclays, which had $18.3bn in assets under management (AUM) at the end of 2015. However, DBS did not bid aggressively at the auction process because many bankers at the Barclays division were known to be in talks to move to other companies, after the departure of Didier von Daeniken, Barclays Asian wealth chief.

This hesitance by DBS over poaching fears made it easy for OCBC to win the deal. The deal is beneficial for OCBC as it would allow its private bank, Bank of Singapore, to better compete with DBS, whose private bank is currently Singapore's largest in terms of AUM. While DBS's private bank manages about $75bn of assets, Bank of Singapore, prior to this deal, had an AUM of $55bn.

The sale follows Barclays announcing in January that it would do away with its Asian cash equities business that would lead to about 1,000 job redundancies in the region. The overall plan to exit Asia is part of a strategy adopted by Barclays chief executive Jes Staley to focus on corporate banking, investment banking and other such core businesses.

Apart from Asia, the strategy includes exiting from other global business divisions as well. Since Staley took over the lead role, Barclays has exited Africa operations and has closed offices in South Korea, Taiwan, Malaysia, Indonesia, Thailand, the Philippines, Australia, Russia and Brazil. However, it still retains its wealth management businesses in India and Japan.

Regarding the current sale, Staley said, "The sale of our wealth and investment management business in Singapore and Hong Kong marks further progress in our aggressive pursuit of non-core cost and risk-weighted asset reductions."

The London-headquartered company is not the only bank to have adopted such a strategy. Other European banks are also known to be considering offloading their Asian assets amid pressures to cut costs back home. Société Générale for example sold its Asian private bank operations to DBS for $200m in 2014.