OCBC outgoing group chief executive will maintain ties with the Singaporean lender as an advisor to the board.
Samuel Tsien has been appointed advisor to the board upon retirement from his CEO role on April 15, according to a regulatory filing.
Tsien will be succeeded by former Greater China CEO at HSBC Helen Wong who rejoins after first starting her banking career with OCBC in 1984.
Tsien will also step down from his role as chairman of the Association of Banks in Singapore in April.
The technology taps on Singapore’s National Digital Identity (NDI) platform and biometric database to enable verification.
OCBC wants to eliminate the need for customers to carry around an ATM card by introducing facial biometrics at its teller machines.
The bank is launching facial recognition at eight of its ATMs tomorrow, which will allow customers to check their account balances. This service will then progressively roll out to OCBC’s entire ATM network of 550 machines for cash withdrawals from June 2021, it said in an announcement on Thursday.
Singapore consumers are keen digital adopters – even the elderly. While cash is still a key mode of payment in Singapore, the digital overlay to get cash is very welcomed by consumers, Sunny Quek, OCBC Bank’s head of consumer financial services, said.
According to the bank, ATM usage remains high with more than 2 million cash withdrawals monthly. At the same time, digital adoption among its customers has grown year-on-year in 2020 with more than 40 percent more customers signed up on PayNow, and PayNow transactions doubling, compared to 2019. QR code cash withdrawals at ATMs grew 88 percent year-on-year in 2020.
He previously spent more than two decades at the Monetary Authority of Singapore, and was deputy managing director, corporate development, when he left in 2019.
OCBC has appointed Andrew Khoo Cheng Hoe as a non-executive and independent director, effective March 8, according to a filing with bourse SGX.
He will serve as a member of the board audit committee as well as the ethics and conduct committee, the announcement said.
Khoo, 57, is an adjunct professor at the NUS Business School. He is also a director at the National Environment Agency, as well as at Stroke Support Station.
Following the acquisition, Horizon Asset Management is now a wholly-owned subsidiary of OCBC Bank through Kim Limited.
OCBC Bank subsidiary Kim Limited has bought the remaining 51 percent of shares in the Malaysian asset manager for RM2.55 million ($630 million) from Sharosu Assets, according to a bourse filing on Thursday.
The consideration, which was determined based on the mutually agreed price of RM1 per share, will be paid in cash, the announcement said. The audited net tangible asset value represented by the proposed acquisition as at Dec 31, 2019, was about RM420,000.
The bank said the acquisition is not expected to have any material impact on the net tangible assets or earnings per share of OCBC Group for the financial year ending 31 December 2021.
The banking industry veteran, with 35 years of banking experience, will take the helm from 14 April 2021.
OCBC has named Helen Wong as the successor for its outgoing chief executive Samuel Tsien, who retires after 14 years at the bank, the firm announced on Friday evening.
Wong, who rejoined OCBC in January 2020 to lead OCBC’s new wholesale banking unit after starting her career at the bank as a trainee in 1984, was appointed after a rigorous global search, the bank said in the announcement.
Wong is widely regarded as a top female banker in Hong Kong with deep Greater China experience and extensive market knowledge and is regarded as an expert on the Southeast Asian region.
She previously spent 27 years at HSBC, where she held various senior management positions in corporate and investment banking, including president and chief executive of HSBC China, head of global banking (Hong Kong), and chief executive of Greater China.
Tsien, 66, joined OCBC Bank in July 2007 as the global head of global corporate bank and was appointed the group CEO in 2012.
In his nine years as the Group CEO, Sam has significantly built the OCBC franchise into a much more diversified and resilient business. He has strengthened the risk culture and internal processes, and instilled a set of solid corporate values to guide the team in doing business in a sustainable way, OCBC chairman Ooi Sang Kuang said in an internal memo to staff.
While the bank’s net interest income was impacted by lower market rates, its banking and wealth management businesses saw strong quarter-on-quarter fee-based growth, and its insurance franchise reported strong sales and new business growth.
OCBC’s net profit for the third quarter of 2020 was S$1.03 billion ($760 million), up 41 percent from the previous quarter’s S$730 million and 12 percent lower compared to a year ago, according to financial results published by the bank on Thursday.
The growth in profit was largely a result of a fall in allowances, OCBC said. The bank set aside S$350 million in allowances during the quarter, which included a management overlay of S$150 million, compared to S$750 million in the previous quarter.
Net interest income declined 4 percent from last quarter’s S$1.42 billion from lower rates – an 11 percent decline from the same period in 2019. At the same time, non-interest income rose 6 percent to S$1.12 billion, led by higher trading income and insurance profit.
The bank reported growth in wealth management fees of 24 percent on-quarter and 4 percent year-on-year to S$252 million.
Assets under management at Bank of Singapore, OCBC’s private banking subsidiary, grew 3 percent from the previous quarter and 5 percent year-on-year to $116 billion (S$159 billion), underpinned by net new money inflows and better market valuations.
At Great Eastern, OCBC’s insurance arm, total weighted new sales rose 51 percent quarter-on-quarter to S$433 million, supported by improved sales both in Singapore and Malaysia, while New Business Embedded Value was 47 percent higher at S$160 million, while the NBEV margin was 37 percent.
OCBC said the full extent of the lagging economic impact of the crisis will only likely have more visibility next year. However, it said it is well-positioned for recovery and is focused on driving long-term sustainable value.
With the outlook still uncertain, it is most important that we continue to strengthen our capital and balance sheet. This will position us well for the crisis and enable us to emerge well-prepared for new opportunities when the market recovers,» Samuel Tsien, OCBC group CEO, said in a statement.
Singapore’s two other listed banks already reported their quarterly earnings – DBS saw its profits fall by 20 percent from the same period last year to S$1.3 billion, while UOB reported a 40 percent decline to S$668 million.
The co-branded solution to address investor needs during times of stress and uncertainty and has a built-in dollar-cost averaging feature. French asset manager Amundi and OCBC Bank on Wednesday announced the launch of the Amundi-OCBC Momentum Fund – a mixed-asset product that invests in global bonds and equity ETFs.
According to its prospectus, the Momentum Fund lets the portfolio manager initiate dollar-cost averaging for the investor. The fund leverages the cost-averaging effect when it systematically allocates assets from an initial pool of fixed income securities to equity ETFs, which helps to average out the costs of investing into equities and position the fund for a potential equity market recovery. Investors are also paid a quarterly dividend of up to 3 percent per annum.
The fund is the first co-branded tie-up between the two partners, though OCBC has been distributing four other products from Amundi, according to the bank’s website.
Investors should stay invested in the market and not wait for blue skies. They should manage risk by investing carefully and staying diversified across asset classes and by taking on risk gradually over time through regular investments – in other words – dollar-cost averaging. This can benefit investors by potentially lowering the average cost per unit of an investment, especially during times of volatility, Tan Siew Lee, OCBC’s head of wealth management, Singapore, said about the new fund.
The bank noted the benefits of a multi-asset strategy in an uncertain economic environment, as it provides relative stability over equities. The fund has a target allocation of 50 percent global bonds and 50 percent global equity ETFs, with a maximum of 25 percent into non-investment grade bonds.
DBS Bank also recently launched a multi-asset fund with Schroders that includes a unique decumulation share class targeted at retiree investors, with exposure to a range of investment growth themes across Asia.
The bank recorded a decline that was steeper than predicted by analysts, owing to soaring provisions for loan losses and shrinking lending income during the Covid-19 pandemic.
OCBC’s net profit for the second quarter of 2020 was S$730 million ($533 million), up 5 percent from the previous quarter and 40 percent lower compared to a year ago, the bank said in its quarterly earnings report published on Friday.
Provisions for credit losses stood at $750 million in Q2, higher than the previous quarter’s $657 million, and $111 million a year ago.
Net interest income fell 9 percent to S$1.48 billion, which the bank said was largely from a 16 basis points decline in NIM as asset pricing adjusted to the significant cuts in interest rates faster than the reduction in customer deposit funding costs
The bank recommended an interim dividend of 15.9 cents per share for the first half of 2020. This represents half of the maximum 31.8 cents dividend per share that OCBC can declare in FY20, as MAS has recommended locally incorporated banks headquartered in Singapore to cap dividends at 60 percent of FY19. A scrimp dividend is also offered, which gives shareholders the option to receive the dividend in the form of shares, with the issue price of the shares set at a 10 percent discount.
This decline is steeper than expected – a Refinitiv poll among analysts expected net income to fall 31.7 percent to S$835 million during the quarter, with earnings per share to fall 24.1 percent year-on-year to S$0.218 per share.
OCBC group CEO Samuel Tsien said the bank has been defensively shoring up its balance sheet and preparing for a slow recovery.
We protected our customer franchise, managed our expenses in line with income expectations, increased our allowance coverage, preserved our capital and raised our capital efficiency to position for the future post-pandemic. We will continue to contain all discretionary expenditures, including management compensation,» Tsien said in a statement.
Singapore’s two other listed banks reported their earnings yesterday – DBS reported a 22 percent year-on-year drop in Q2 net profit for the first quarter to S$1.25 billion, while UOB reported a 40 percent decline.
Since 4 July 2020, OCBC Bank’s 1.8 million digital customers in Singapore have been able to use the SingPass Mobile app as an alternative login to access the full suite of digital banking services via the OCBC Mobile Banking app or Internet banking.
Using SingPass Mobile as an alternate login will especially benefit customers who currently use an access code and PIN instead of fingerprint or facial biometrics to log in to OCBC Bank’s digital banking platforms. The need to remember multiple access codes and PINs is eliminated while enabling customers to securely access digital banking services. This market-leading service has been enabled for OCBC Bank customers by integrating digital banking access with Singapore’s National Digital Identity (NDI) platform.
SingPass Mobile login will further accelerate digital banking adoption
Since the Covid-19 outbreak in Singapore, digital transactions among OCBC Bank customers have surged as the pandemic accelerated digital adoption.
Close to 100,000 ‘digital debutantes’ have started using digital banking for the first time this year. There has been a 40% jump in digital transactions performed by those aged 50 to 64, while those above 64 years old clocked a 48% increase in digital banking transactions from last year.
Managed by the Government Technology Agency (GovTech), the SingPass Mobile app allows users to transact with over 60 government agencies online securely. More than 1.6 million Singapore residents today use the SingPass Mobile app to access government e-services including checking their Central Provident Fund (CPF) account balances, filing taxes and applying for public housing. Many now also use the app for SafeEntry logins at venues to facilitate contact tracing.
Mr Aditya Gupta, OCBC Bank’s Head of Digital Business for Singapore and Malaysia, said: “Inclusion and accessibility have been core to our digital transformation narrative. I believe that offering SingPass – a trusted and widely used mode of digital authentication in Singapore – as an alternate login, will give more of our customers the confidence and convenience to bank with us digitally. We have partnered with GovTech to pioneer the co-creation of a trust ecosystem for Singapore’s banking industry using the national digital identity platform, which will radically improve how our customers access and experience our digital services.”
Mr Kwok Quek Sin, Senior Director, National Digital Identity, GovTech, said: “OCBC Bank is known for many of its innovative efforts in leading digital transformation and has been one of the early adopters of our National Digital Identity strategic platform. This month, OCBC Bank has started to offer SingPass as an alternative login to access their digital banking services. We are happy to be able to support our Singapore companies in their exciting digitalization journeys. GovTech will continue to push out more products on the national digital identity platform to help businesses enhance digital service delivery, improve customer experience and bring about productivity gains.”
Mr Sopnendu Mohanty, Chief FinTech Officer, Monetary Authority of Singapore (MAS), said: “The foundation of the digital economy is the seamless integration of public digital infrastructures with essential services. We are delighted that OCBC Bank has broken new ground by enabling access to financial services with SingPass Mobile. MAS has been working closely with the financial industry to foster the adoption of foundational digital infrastructures such as national digital identity for seamless integration with the growing digital economy. With the convergence of SingPass Mobile, MyInfo, and PayNow, customers can open bank accounts, access banking services and make payments online seamlessly yet safely.”
OCBC Bank at the forefront of leveraging National Digital Identity infrastructure for digital banking services
In June 2018, OCBC Bank became the first in Singapore to enable instant deposit account opening using MyInfo – the national data repository – integrated with the Bank’s proprietary real-time digital know-your-customer process (e-KYC).
A year later, in May 2019, OCBC extended the use of MyInfo and OCBC Bank’s e-KYC process to online applications for cards, personal loans and lines of credits. This was then extended to home loans and car loans in Feb 2020.
Within three months of launch, digital card applications grew 3.5 times, while online personal loan applications grew nine-fold. Three in 4 credit cards are acquired digitally, and 3 in 4 deposit accounts are opened digitally leveraging MyInfo. The integration of MyInfo in the digital product application process has enabled OCBC Bank to offer 60-second approvals for car loans, and 60-minute approvals for home loans. One in 3 home loans and 2 in 3 car loans have been approved and accepted via this process within four months of its launch.
OCBC Bank announced it would reopen five branches tomorrow, 19 June 2020, due to the expected increase in customer traffic as Singapore enters Phase Two of ‘Safe Re-opening’. They are located in Bishan, Buking Panjang, Jurong West, and at City Square Mall and Paya Lebar Square. This brings the total number of branches open up to 32. The remaining branches which were closed during Singapore’s ‘circuit breaker’ period will progressively reopen over the next two weeks.
OCBC Bank will also resume all in-person meetings with customers on an appointment basis for all financial services. These meetings can be held within the bank’s premises or at external locations, and include home loan applications, bancassurance sales and wealth management advisory services for bonds, funds, and structured investments (which took effect on bank premises since 12 June 2020) for retail banking. In-person meetings by appointment will also resume for corporate and commercial banking services for large corporates and small-and-medium enterprises (SMEs).
However, OCBC Bank’s retail banking customers are encouraged to continue to use its virtual wealth advisory service, which includes the comprehensive Financial Needs Analysis, for their financial planning needs. The virtual wealth advisory service via secure video conferencing with an OCBC Bank financial advisor was launched on 18 April 2020during the Circuit Breaker.
Safe distancing measures continue to be enforced
For the safety of employees and customers, OCBC Bank employees will wear face masks while rendering the in-person home loans, bancassurance and wealth advisory services. Customers are required to wear face masks. All employees and customers entering OCBC Bank branches have been using SafeEntry since the app was mandated as a contact tracing tool. TraceTogether has been used by all branch employees and by customers who are coming to the branches for face-to-face wealth advisory services.
Temperature screenings and one metre queue markings at branches are strictly enforced to keep employees and customers safe. Employees also ensure that customers are practicing safe distancing of at least one metre within the branch waiting area. At branch locations where it is feasible, separate queues with seats are provided for elderly and pregnant customers. Branch employees will assist seniors to perform the SafeEntry QR code scanning if they are unable to do so independently.
Mr Sunny Quek, OCBC Bank’s Head of Consumer Financial Services, Singapore, said: “As we transition to Phase Two of Singapore’s ‘Safe Reopening’, we continue to encourage our customers to use our digital banking platforms for their day-to-day banking needs, and to invest in wealth management products and apply for credit cards, home loans and personal loans. While all our branches will open progressively and we look forward to serving our customers’ needs, our financial advisory services will continue to remain available virtually via video conferencing with our financial advisors, so customers can receive timely investment and financial advice from the comforts of their home, without having to come to a branch.”
The list of 32 branches and one dedicated OCBC Premier Banking Centre in operation from 19 June 2020 are:
| Branch | |
| 1 | Ang Mo Kio |
| 2 | Ang Mo Kio Central |
| 3 | Bedok |
| 4 | Bedok North |
| 5 | Bishan |
| 6 | Bukit Batok |
| 7 | Bukit Panjang |
| 8 | Causeway Point |
| 9 | Choa Chu Kang |
| 10 | City Square Mall |
| 11 | Clementi |
| 12 | Compass One |
| 13 | Harbourfront |
| 14 | Hougang Mall |
| 15 | ION Orchard |
| 16 | Jurong East |
| 17 | Jurong Point |
| 18 | Jurong West |
| 19 | Marine Parade |
| 20 | NEX |
| 21 | NorthPoint |
| 22 | OCBC Centre |
| 23 | Orchard Gateway |
| 24 | Paya Lebar Square |
| 25 | Sixth Avenue |
| 26 | Sun Plaza |
| 27 | Tampines |
| 28 | Thomson |
| 29 | Tiong Bahru Plaza |
| 30 | Toa Payoh Centre |
| 31 | Waterway Point |
| 32 | White Sands |
| Dedicated OCBC Premier Banking Centre | |
| 1 | Parkway Parade |
The bank launched its virtual wealth advisory service in April, at the height of Singapore’s partial lockdown, and saw a 45-percent increase in the sale of wealth products in the first 10 days, compared with the 10 days.
OCBC Bank has seen a positive response from its customers to non-face-to-face wealth conversations, as sales of wealth products, including unit trusts to bancassurance products, and from structured investments and bonds to foreign exchange products, grew when it moved the wealth advisory process online as a result of the Covid-19 outbreak.
This has allowed customers to review their investment portfolios during a time of market volatility and seize investment opportunities, OCBC said in a press release on Tuesday.
The highly regulated wealth advisory process was previously a complex face-to-face process involving over 50 pages of documents and a comprehensive Financial Needs Analysis. But since April 18, the bank’s financial and wealth advisors have been conducting meetings and sales advisory via video and screen-sharing facilities in place of physical face-to-face interactions, using e-signatures and pdf documents sent via encrypted email instead of paper.
The bank highlighted growing digital adoption for both banking and wealth solutions in the first quarter of the year, including investments made on its RoboInvest platform, as well as online time deposit placements and unit trust purchases.
While many customers are still accustomed to face-to-face interactions with our bankers, even after the Covid-19 outbreak, this virtual process will become a new normal, Sunny Quek, OCBC Bank’s head of consumer financial services, Singapore, said.
OCBC previously said it is rethinking its branch network strategy Covid-19 circuit breaker has diverted traffic from physical branches and prompted a surge in the adoption of digital baking services.
The bank said branch closures during the Covid-19 «circuit breaker» has diverted traffic from physical branches.
A surge in the adoption of digital baking services is prompting OCBC to rethink its branch network strategy while providing an impetus for the bank to continue its investment in technology and digitalization, said Samuel Tsien.
The bank is expecting a higher net operating profit in the longer term as a result of reduced manpower costs and fewer physical branches and offices being open in the future, the bank’s chief executive officer said during its virtual annual general meeting on Monday.
We do expect that the cost increase will be managed and the cost-income ratio of the bank would continue to improve,» Tsien said, noting that despite branch closures, the bank has not made overhead cost savings as its network of ATMs remains operational and continues to pay its branch staff in full.
The bank closed 22 of its 46 branches in early April as part of Singapore’s stricter social distancing measures to contain the spread of Covid-19. OCBC Securities, its wholly-owned brokerage subsidiary, temporarily closed its Investors Hub and encouraged customers to use digital, email, and telephone channels as far as possible and minimize face-to-face interactions.
According to OCBC Bank, there has been a huge acceleration in the take up of digital services, from new account opening to day-to-day transactions to investments.
In the first quarter of the year, OCBC opened three times the number of SME accounts digitally compared to the year before and saw a sevenfold increase in the number of PayNow Corporate transactions. The share of SME loans applied digitally has also grown to 49 percent, up from 30 percent in 2019.
Net profits at OCBC plunged 43 percent in the first quarter due to non-operating losses from its insurance arm and increased provisions most notably for oil-linked exposure.
OCBC posted S$698 million ($494 million) in quarterly net profits – below analyst estimates of $666 million, according to Refinitv data.
Its insurance contributions nosedived 94 percent year-on-year due to unrealized mark-to-market losses and its total allowances were increased from $176 million to $465 million which includes $195 million set aside for a «Singapore-based corporate customer in the oil trading sector».
Recently, OCBC was reportedly amongst the lenders to disgraced oil trader Hin Leong, with an estimated exposure of $220 million.
Driven by fee income wealth management and brokerage units, non-interest income was up 11 percent to $551 million. Net investment gains were also up at $84 million due to the sale of debt securities.
Net trading income plummeted by more than 90 percent to reach $13 million due to unrealized mark-to-market losses in Great Eastern’s investment portfolio.
Despite a still stable balance sheet – non-performing loans were up by only 2 bps while net interest margin remained at 1.76 percent – the additional provisions signal further headwinds ahead in light of the effects from the coronavirus pandemic.
According to OCBC group CEO Samuel Tsien, the coming period is expected to be very difficult for individuals and businesses.
We paid close watch on our credit portfolio against the market uncertainty, and significantly shored up our allowances on a forward-looking basis, he said.
The bank will pay its final dividend of S$0.28 per share on June 5, after approval at the AGM. OCBC Bank will hold its annual general meeting on May 18 at 2 p.m. as a webcast or audio-only live stream, the bank said in a letter to shareholders.
Shareholders attending the virtual AGM will not be able to vote online and can do so only by proxy, with the bank encouraging the submission of proxy forms by email, given delays with the postal service.
The meeting was originally scheduled for 30 April, but had to be postponed following government measures that imposed stricter measures about gathering in public, given the Covid-19 virus outbreak.
Singapore is currently under a partial lockdown until June 1, with members of the public only allowed to leave their homes to conduct essential activities.
Singapore Exchange Regulation previously announced an automatic 60-day extension of the deadline for all issuers with financial year-end on or before 31 March 2020 to hold their AGMs, in light of government advisories amid the Covid-19 situation.
OCBC is the second local bank to announce a virtual AGM after DBS, which rescheduled its meeting from March 31 to April 30.
The bank hopes to encourage more people to stay home and comes in support of stricter social distancing measures implemented by the government to contain the spread of Covid-19.
OCBC Bank’s wholly-owned brokerage subsidiary, OCBC Securities, will temporarily close its Investors Hub at OCBC Centre South from 20 April to 4 May 2020, it announced in a statement on Friday.
The bank said customers will be able to continue to trade or make transactions through their trading representatives or on OCBC Securities’ digital platform, iOCBC, as the brokerage will continue to be operational during this time.
The Monetary Authority of Singapore also urged the public to minimize visits to their premises during the current circuit breaker period.
«While financial services remain available as one of the essential services exempted from the suspension of activities at workplace premises announced by the Ministry of Trade and Industry (MTI) on 3 April 2020, customers are urged to use digital, email, and telephone channels as far as possible and minimize face-to-face interactions at FI premises,» the regulator said in a statement on Friday.
About half of the bank branches in Singapore have closed, along with most of the physical service locations of insurers, brokers and fund managers, in view of reduced customer traffic.