The new onshore unit will be run by OCBC NISP, the Indonesian subsidiary that is 85 percent owned by OCBC Bank. Its target clients are Indonesians with assets under management of more than $1 million.
OCBC, citing Capgemini's Asia Pacific Wealth Report 2016, said in a statement there are 48,000 high net worth individuals in Indonesia with a total wealth of $161 billion.
Wealthy Indonesians have long been a big business segment for Singapore's wealth management industry. In the recently concluded Indonesian tax amnesty program, the Southeast Asian city state accounted for 73 percent of total assets declared and 57 percent of assets repatriated back to Indonesia, according to media reports.
"There are many new opportunities in the high net worth segment for the local Indonesian banks as a result of the successful completion of the government's tax amnesty program," Parwati Surjaudaja, President Director of OCBC NISP, said in a statement.
Singapore banks have been expanding their wealth management businesses in the past few years. OCBC bought Barclays' Asia wealth business, while DBS Group Holdings took over Societe Generale's and ANZ's units.
The banks benefited from their expanded wealth management units. In the last few weeks, DBS, OCBC and their smaller rival United Overseas Bank (UOB) reported better than expected first quarter net profits thanks to their wealth management businesses.
"The launch of OCBC NISP Private Banking is an important milestone in the expansion of OCBC's wealth management franchise... This new business enables us to broaden our client coverage of high net worth individuals," said Samuel Tsien, OCBC Bank's Group CEO.