Oversea-Chinese Banking Corp. unveiled a target to boost revenue from business flows between Greater China and Southeast Asia as trade between the key markets increases.
Singapore’s second-largest lender aims to generate S$3 billion ($2.2 billion) in accumulated revenue through 2025 by focusing on the two trade blocs, Chief Executive Helen Wong said Monday.
“Macro trends are telling us we are in the right markets,” Wong said at a news briefing in Hong Kong. The target is on top of the group’s expected revenue growth from other businesses, she said.
Geopolitical tension makes intra-Asia trade and investments and wealth flow “ever more important,” said Wong. “Covid points to the fact that you do want to maintain closer ties with your nearby neighbors,” she added.
China’s slowing economic growth will be a test of resolve for OCBC and other global banks that are looking to expand in the nation.
Read how global banks face a reality check in China
The revenue target suggests OCBC remains positive about its prospects in Greater China despite the mainland’s “bumpy” reopening from Covid restrictions, according to Bloomberg Intelligence. “The reopening may support Asean-Greater China trade and investment flows,” BI analysts including Rena Kwok wrote in a note.
Before the pandemic, in 2018 OCBC sought to double pretax profit from China’s Greater Bay Area to S$1 billion by 2023. The growing region around the southern province of Guangdong that also encompasses Hong Kong and Macau has been earmarked for both manufacturing and finance development, enticing global firms to set foot in.
Wealth Targets
The Singapore lender also outlined targets for its wealth business, including having 500 relationship managers and $145 billion of assets under management by end-2025, up from over 400 and $124 billion respectively.
The bank last year hired Jason Moo, who spent more than two decades at Goldman Sachs Group Inc., as chief of its private banking unit. The city state has benefited from wealth flows as it’s seen as a safe harbor, according to Moo.
“Amid geopolitical tensions around the world, Singapore remains a fairly neutral, fairly independent sovereign,” Moo said at the briefing. “We’re getting quite a bit of interest in Singapore as a jurisdiction.”
The bank also launched a campaign on Monday to unify its brand across its core markets. Its Hong Kong unit is dropping “Wing Hang” from its name to be known as OCBC Bank (Hong Kong) Ltd. OCBC acquired Hong Kong’s Wing Hang Bank Ltd. in 2014 to gain more access to Chinese companies that are expanding in Southeast Asia.
Greater China is one of the four key focus areas for OCBC, along with Singapore, Malaysia and Indonesia. The region contributed 20% of OCBC’s pretax profit in 2022, second to Singapore’s 51%, according to the bank’s data.
When asked about potential acquisitions in Indonesia, Wong said the country has “a lot of opportunities” with a young population and growth in consumption, adding that “if the right opportunity comes up, we will consider.”
--With assistance from Chanyaporn Chanjaroen.
(Updates with Bloomberg Intelligence reaction in the fifth paragraph and details from briefing throughout)
