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Barclays sells Asia wealth unit at cut price

Barclays completes sale of its wealth and investment management business in Singapore and Hong Kong to Bank of Singapore.

Barclays plc completed the sale of its wealth and investment management business in Singapore and Hong Kong to Bank of Singapore Ltd Monday for almost a third less than expected as it continues to shed its non-core assets.

The buyer, a wholly-owned private banking subsidiary of Oversea-Chinese Banking Corporation Ltd, paid $225 million for the unit that has assets under management of $18.6 billion at the end of last year. The deal will result in a pro forma decrease in risk weighted assets of almost £800 million.

Barclays had predicted the sale would be $320 million when it was announced in April, decreasing risk weighted assets by approximately $1.3 billion.

The original price estimate of 1.75% of assets under management was ultimately decreased, however, when a greater number of wealth management clients in Asia opted, after given the choice to stay with Barclays or go with the buyer, to remain. Barclays still operates a corporate and investment banking business in Singapore and Hong Kong.

The sale comes as financial institutions face more regulation and concerns over capital strength. The European Banking Authority in July found that Barclays’ capital buffer would shrink to 7.3% of its assets in the worst case scenario of stress tests, making it one of the worst performing banks in the U.K.

The U.K.-based bank started selling off its non-core assets in a bid to focus on its core assets and reduce its risk weighted assets. It set up Barclays Non-Core (BNC) in May 2014 and the program is expected to continue until the end of 2017.

“This is another example of the great progress we have made this year in BNC, as we aim to reduce risk weighted assets to £23 billion in 2017 and reintegrate the remainder of the unit back into the Group, ” Jes Staley Barclays Group CEO said today in a statement.

The company has sold off 18 businesses since 2014 and has so far this month it has sold off its southern European card business, its Irish insurance business and its life risk insurance book in Spain.

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