OCBC, the Singapore-based bank, is strategically targeting “longer term opportunities” in Greater China and Southeast Asia.
CEO Helen Wong expressed her expectation that this strategy will generate an additional revenue of $2.2 billion by 2025, in an interview with CNBC on Monday.
The second-largest bank in Southeast Asia revealed on Monday its plans to unify its brand across core markets in Greater China (including Hong Kong and Macao) and Southeast Asia.
Wong, speaking to CNBC, highlighted the macro trends indicating that the combined region of Greater China and ASEAN (Association of Southeast Asian Nations) is expected to play a significant role in contributing to global GDP growth.
She further pointed out that the trade numbers from the past four years indicate a compound annual growth rate (CAGR) of 13% for China and ASEAN. CAGR is a metric that measures the annualized rate of return for an investment, assuming reinvestment of profits at the end of each year.
Wong stated in a media release that factors such as China’s post-pandemic reopening, the emergence of ASEAN as part of the “China plus one” strategy, and other geopolitical dynamics have significantly enhanced the business opportunities and flows between the two regions.
Despite observing a slowdown in economic growth within certain countries of the region, Wong expressed confidence in OCBC’s ability to seize growth opportunities by “putting our act together.”
She mentioned that the bank will enhance its digital customer interactions and refine its customer and business acquisition strategies to achieve this, without providing further specifics.
Additionally, Wong highlighted that OCBC and its subsidiaries serve the leading seven markets within ASEAN, while also maintaining a presence in 17 cities across Greater China, which includes Hong Kong, Macao, and Taiwan. She further mentioned the bank’s partnership with the Bank of Ningbo as a strategic advantage.
When questioned about the bank’s outlook for the latter half of 2023, Wong anticipated that it would likely remain relatively stable.
Wong stated that the current high interest rate environment has been beneficial for the bank’s interest income. However, she acknowledged a decline in fee income as investors exercise caution in their investments due to the prevailing uncertain economic conditions.
Wong mentioned that OCBC possesses additional revenue streams, including insurance income, which have the potential to contribute to its growth.
Nevertheless, she acknowledged the possibility of uncertainty regarding interest rates, noting that they could either persist at their current levels or potentially rise slightly.
Consequently, OCBC will closely monitor the potential impact of prolonged high interest rates on its credit portfolio. Wong also highlighted that if interest rates persist at elevated levels, customers are likely to adopt a more cautious approach towards their investment activities.
Source : cnbc.com
