Southeast Asia’s second largest bank announced Monday that it will be unifying its brand across its core markets in Greater China — which includes Hong Kong and Macao — as well as Southeast Asia.
- “If you look at macro trends, Greater China and ASEAN together is going to continue to contribute more to the world’s GDP growth,” CEO Helen Wong told CNBC.
Singapore’s Oversea-Chinese Banking Corporation has set its sights on “longer term opportunities” in Greater China and Southeast Asia and expects the strategy to bring an additional revenue of $2.2 billion by 2025, CEO Helen Wong told CNBC on Monday.
Southeast Asia’s second largest bank announced Monday that it will be unifying its brand across its core markets in Greater China — which includes Hong Kong and Macao — as well as Southeast Asia.
“If you look at macro trends, Greater China and ASEAN together is going to continue to contribute more to the world’s GDP growth,” Wong told CNBC, referring to the 10-nation Association of South East Asian Nations bloc.
“If you look at the trade numbers for the last four years, China and ASEAN — they’re growing at a CAGR of 13%,” she added. Compound annual growth rate is a measure of annualized returns for an investment over a period of time, assuming profits are reinvested at the end of each year.
In a media release, Wong said “the effects of China’s reopening post-pandemic, the rise of ASEAN for the China plus one strategy and other geopolitical factors” have amplified the potential business flows between the two regions.
As such, while the OCBC has seen slowing economic growth in some countries in the region, Wong said she’s confident it will be able to capture growth as it “puts our act together.
This will be done by improving how it deals with customers digitally, as well as improving the way the bank captures customers and businesses, she said without offering more details.
She also pointed out that OCBC and its subsidiaries service the top seven markets in ASEAN, and can rely on a presence in 17 cities in the Greater China region, including Hong Kong, Macao and Taiwan, as well as its partnership with the Bank of Ningbo.
Outlook for 2023
Asked about the bank’s outlook for the next half of 2023, Wong said it will “probably will be quite stable.”
She said the high interest rate environment has helped its interest income, even as income from fees has fallen as investors hold back on investing due to the uncertain economic environment.
But OCBC has other revenue streams that could contribute to growth, such as insurance income, Wong said.
However, she also acknowledged there may be uncertainty as interest rates could potentially remain at current levels or be “a little bit higher.”
As a result, OCBC will have to pay attention to whether its credit portfolio may be impacted by prolonged high interest rates. Also, if rates continue to be high, customers are likely to be “a little bit on the sidelines as to their investment activities,” Wong pointed out.
