[HONG KONG] OCBC : O39 0% is banking on China’s improving economic condition and resultant positive spillovers into Asia as key growth drivers, as it plans further investments into its services across the Greater China region.
The bank aims to invest HK$1.5 billion (S$259.1 million) into its technology and facilities in Greater China – which includes the China, Hong Kong, Macau and Taiwan markets – over the next three years.
This will be used to modernise its technology platforms, channels and products, group chief executive Helen Wong announced on Wednesday (May 29).
To support its digital upgrades, the bank also aims to expand its regional engineering hub and hire around 300 new talents over the next three years.
“I believe China offers the business opportunities helping the whole of Asia to grow… (and) offering the talent and technology that we would be very happy to use,” said Wong.
She was speaking at a media briefing covering the bank’s updated investment plans in Greater China, held at the Regent hotel in Hong Kong.
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Speakers at the event included Wang Ke, the bank’s head of Greater China and CEO of OCBC Hong Kong, as well as Rickie Chan, Bank of Singapore (BOS) Greater China’s head of private banking and its Hong Kong branch CEO.
Wong’s announcement comes as OCBC works towards its goal of adding S$3 billion in revenue from its Asean-Greater China strategy by 2025.
The target was first announced nearly a year ago, when the bank launched a new brand and logo to present a unified front across its markets in Singapore, Malaysia, Indonesia and Greater China.
Banking on China growth
Wong noted that Greater China has been a key contributor to OCBC’s group profit, growing at a compound annual growth rate of 24 per cent in the last 10 years.
The bank has S$95 billion worth of assets in the Greater China region, as at Dec 31, 2023, in addition to a 20 per cent stake in the Bank of Ningbo. Since 2012, OCBC has been establishing Greater China business offices across Asean to capture the links between the two regions.
Wong said affluence has been growing in both regions, and that the group’s efforts to build twin hubs in Singapore and Hong Kong have supported high-net-worth individuals’ wealth planning.
She also highlighted China’s improving growth as likely to have positive spillovers to the rest of Asia, noting that the country’s gross domestic product growth of 5.3 per cent year on year for the first quarter “pleasantly surprised some people”.
China is also putting more money towards the research and development of technology, including artificial intelligence (AI), she added.
OCBC has also been building up its Greater China technology platforms. The group in 2022 completed its first phase of technology advancements in the region, which include upgrading its core banking systems and doubling the frequency of pushing out digital features.
Planned enhancements
The second phase includes the intended HK$1.5 billion investment. Of the sum, HK$1 billion will be poured into modernising the bank’s platforms, covering key domains of technology architecture and embedding AI capabilities into various business areas.
OCBC aims to achieve 90 per cent system standardisation in Hong Kong within the next three years for its channels and services, products, management and control, as well as infrastructure.
Wang, the bank’s Greater China head, said the group will leverage its prior experience of upgrading the China business’ core banking system.
“Two years ago, we successfully modernised the core banking system in China, and today, we are seeing tangible results of that, including the enhanced bank capability to meet dynamic customer needs and support the timely roll-out of new products or services,” he said.
He also highlighted how the addition of AI will enable new capabilities and boost productivity, supporting both the Hong Kong and Macau markets.
He noted that OCBC currently serves more than 20 per cent of the population in Macau. Its retail business there is about one-third the size of that in Hong Kong, which is “quite meaningful”, he added. The Hong Kong business has around 200,000 retail customers.
He said that the remaining investment of HK$500 million will go into “workplace upgrades”, adding that the company is signing a new office lease in Hong Kong, which will make it more convenient for staff to commute to work.
Growing talent strength
OCBC is also aiming to grow its regional engineering hub, which it started in China a few years ago, said group CEO Wong. At the end of last year, the hub had around 400 staff, and there are plans to hire 300 more by 2026.
The group did not disclose an expenditure amount for its engineering capabilities expansion, but said it would be lower than the HK$1.5 billion spent on technology and workplace enhancements.
Meanwhile, OCBC’s private banking subsidiary BOS is looking to achieve 50 per cent assets under management (AUM) growth in Hong Kong by the end of 2026 – “an ambitious target”, said Chan, BOS’ Hong Kong CEO.
BOS had US$116 billion of AUM at the last check, he said. While the private bank does not disclose AUM in specific markets, Greater China is its second-largest market, after Asean, he noted.
He added that BOS Hong Kong has been “very aggressive in hiring good talent” to grow its pool of relationship managers.
While he declined to give a number, he noted that it grew 15 per cent in the first four months of the year, and he expects this pace of increase to continue for the rest of the year.
