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Singapore Oversea-Chinese Banking Corporation has focused on “long-term opportunities” in Greater China and Southeast Asia and expects the technique to generate additional $2.2 billion in revenue by 2025, CEO Helen Wong told CNBC on Monday.
Southeast Asia’s second-largest bank announced on Monday that it might unify its brand across its essential markets in Greater China – including Hong Kong and Macau – and Southeast Asia.
“In the event you have a look at macro trends, Greater China and ASEAN together will proceed to contribute more to global GDP growth,” Wong told CNBC, referring to the 10-nation bloc of the Association of Southeast Asian Nations.
“In the event you have a look at the trade figures for the last 4 years, China and ASEAN – they’re growing at a CAGR of 13%,” she added. The compound annual growth rate is a measure of the annual returns on investments over a time frame, assuming that the profits are reinvested at the top of every year.
In a media release, Wong said that “the results of post-pandemic China reopening, ASEAN growth for China, and one strategy and other geopolitical aspects” have strengthened potential business flows between the 2 regions.
As such, while OCBC has noted a slowdown in economic growth in some countries in the region, Wong said she is confident she’s going to find a way to capture the growth because she is “combining our efforts.”
OCBC announced Monday that it’ll unify its brand across its essential markets in Greater China in addition to Southeast Asia.
OCBC
This might be achieved by improving the best way the bank deals with customers digitally, in addition to improving the best way the bank acquires customers and businesses, she said without giving more details.
She also noted that OCBC and its subsidiaries serve the seven largest markets in ASEAN and can depend on a presence in 17 cities in the Greater China region, including Hong Kong, Macau and Taiwan, in addition to a partnership with Bank of Ningbo.
Outlook for 2023
When asked in regards to the bank’s outlook for the following half of 2023, Wong said it might “probably be quite stable.”
She said the high rate of interest environment helped her interest income, at the same time as fee income fell as investors hold back on investing resulting from the uncertain economic environment.
But OCBC has other sources of revenue that would contribute to growth, equivalent to insurance revenue, Wong said.
Nevertheless, she also acknowledged that there may very well be uncertainty as rates of interest could potentially stay at current levels or be “barely higher”.
In consequence, OCBC will have to be vigilant about whether its loan portfolio may very well be affected by prolonged high rates of interest. Also, if rates proceed to be high, customers are more likely to be “a bit on the sidelines relating to their investment activity,” noted Wong.
As a regional bank – the second largest in Southeast Asia – OCBC also saw an influx of cash from the collapse of US regional banks earlier this 12 months.
“At any time when there is any change, any weakness in some parts of the industry, there is a flight to quality. Being a highly rated bank based in Asia, we’re seeing an influx of recent money,” she said.
Nevertheless, the goal is not only to get the cash in, but additionally to maintain it with OCBC.
Wong stressed that the bank must ask itself, “Have any lessons been learned from this? How does this actually affect customers? Are we prepared to serve customers when money is also coming in?”
OCBC shares are up nearly 9% during the last 12 months and closed at 12.30 Singapore dollars on Monday.