Belt and Road in OCBC’s sights
(14 August 2017 – Singapore) Oversea Chinese Banking Corporation (OCBC) is targeting growth via China’s flagship “Belt and Road Initiative” and Greater Bay Area projects, chief executive Samuel Tsien has highlighted.
Speaking to South China Morning Post, OCBC chief said the bank hopes to profit from servicing the flows of business and wealth from China into South East Asia.
At the present time, our objective is to permeate as much as possible into those projects,” he said.
“We hope that an additional four or five per cent of our assets will come from the China flow business in the future.”
OCBC had assets of S$429 billion (A$398 billion) at the end of June according to its interim results.
Around a fifth of OCBC’s pre-tax profits came from Greater China in the first half of this year.
“The previous way of doing business, where you have everything mapped out before you jump, has passed,” he said.
“The world is changing so quickly that if the direction in which a project is heading for the next two years looks attractive, and you think you have a competitive advantage, you have to go for it, even if you are not sure where it will end up in five years.
“The belt and road means there will be more flows from China into rest of the world. To me that’s a business opportunity. I don’t need to define it.”
Despite the chief executive of rival bank, ICBC Asia saying Chinese corporates preferred domestic banks over international lenders, Tsien said it did not impact his outlook. Supporting Tsien’s position, recent East & Partners’ research found that large Chinese enterprises were looking outside of their domestic providers for trade finance.
“I think the Chinese policy banks have a competitive advantage over us, and the Chinese banks do too, but the flow will be so big that no one category of bank will be able to do it all,” he said.
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