Morningstar | OCBC Is Well Positioned for Growth in the Asia Region; Wealth Management a Key Driver
Oversea-Chinese Banking Corporation is a long-established bank and one of the three largest banks in Singapore. While OCBC has been ablaze on the acquisition trail over the past two decades, the pace will slow going forward, with any additional acquisitions being strategic bolt-ons. Prudent valuation, a focus on forming partnerships, and seeking targets with similar cultures are key considerations. The acquisitions expanded the bank's geographical presence and strengthened its capabilities. The bank’s private bank division, Bank of Singapore, was established by the acquisition of ING’s business, as the latter exited the Asia region following the global financial crisis, and the bank's scale was increased by bolting on Barclay's wealth-management arm in Singapore and Hong Kong, and later National Australia Bank's wealth management business. Its bancassurance business was built on the gradual acquisition of stakes in Great Eastern. In Indonesia, the bank raised its stake in PT Bank NIP to 85% from 23%, and the most recent acquisition of Wing Hang Bank in Hong Kong provides a good platform and currency base to expand its presence in Greater China. The bank also took a 20% stake in the Bank of Ningbo in 2006. We believe OCBC has the breadth to grow organically in the region. Its platforms are largely in place across multiple regions, and it is looking to penetrate markets with its extensive financial products. OCBC employs a build-transfer approach, in which it develops financial products for its home market in Singapore before extending them to its subsidiaries across the region. Along with mass-market financial products, wealth-management products encompass all stages of life. In small to midsize and corporate banking, the bank is well positioned for an increase in regional trade in Asia. Its presence in multiple countries in Asia allows it to facilitate clients' ambition to expand across the region in Greater China and Southeast Asia.Oversea-Chinese Banking is engaged in the in the business of banking, life assurance, general insurance, asset management, investment holding and stockbroking. Co.'s segments include: Global Consumer Financial Services, which provides deposit products, consumer loans, credit cards and wealth management products; Global Corporate Banking, which provides long-term loans, short-term credit, deposit accounts and fee-based services such as cash management and custodian services; Global Treasury, which is engaged in foreign exchange activities, money market operations, fixed income, as well as structured treasury products; and Insurance, which provides both life and general insurance products.
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