PT Bank OCBC NISP (OCBC Indonesia) has agreed to acquire PT Bank HSBC Indonesia -- HSBC's retail banking and wealth management operations in Indonesia – known as International Wealth and Premier Banking (IWPB Indonesia).
HSBC's IWPB Indonesia's portfolio includes customer deposits, investment products covering bonds, mutual funds and insurance, credit cards and retail loans and will boost OCBC Indonesia’s wealth management business. IWPB Indonesia has a client based of 336,000 individuals across 26 branches.
Excluding one-off transaction costs, the transaction will be earnings accretive to OCBC after completion, which is expected in the second quarter of 2027, according to a media release.
The amount will be calculated based on net asset value of IWPB Indonesia at completion, plus a premium of up to approximately IDR 6.5 trillion ($373 million), which is subject to the adjustment mechanisms in the agreement.
The amount paid will also be determined on completion and will take into account factors including IWPB Indonesia’s business prospects and the potential synergies to be realised by OCBC Indonesia.
The transaction involves the transfer of IWPB Indonesia’s assets and liabilities to OCBC Indonesia.
The total assets under management (AUM) to be transferred is IDR89.8 trillion. This comprises IDR58.2 trillion of customers’ investments in mutual funds and bonds, as well as insurances, and customer deposits of IDR31.6 trillion. As part of the transaction, a small customer retail loan book of IDR4 trillion will also be transferred, according to a May 4 OCBC media release.
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 also augment OCBC Indonesia’s wealth management's business by adding around 1,300 staff, and adds to its 'whole-of-wealth' proposition, as part of OCBC's integrated financial services group which comprises private banking under Bank of Singapore and insurance under Great Eastern.
Tan Teck Long, group chief executive of OCBC, said in a media release: “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.”
Tan Teck Long added: “The large deposits base of S$2.3 billion ($1.8 billion) with sizable CASA (current account savings account) 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."
"We look forward to serving HSBC Indonesia’s retail and wealth customers and welcoming our new colleagues to the OCBC family," he continued.
OCBC Indonesia said that it will work closely with HSBC Indonesia to ensure a smooth migration of customers and employees following completion of the acquisition
