Singapore Overseas Chinese Banking Corporation has focused on “long-term opportunities” in Greater China and Southeast Asia and expects the strategy to generate $2.2 billion in additional revenue by 2025, CEO Helen Wong told CNBC on Monday.

Southeast Asia’s second-biggest bank announced on Monday that it would unifying your brand in its main markets in Greater China – including Hong Kong and Macau – as well as in Southeast Asia.

“If you look at macro trends, Greater China and ASEAN together will continue to contribute more to global GDP growth,” Wong told CNBC, referring to the 10-nation bloc of the Association of Southeast Asian Nations.

“If you look at the trade numbers over the last four years, China and ASEAN – they are growing at a CAGR of 13%,” she added. The compound annual growth rate is a measure of the annualized returns on an investment over a period of time, assuming the profits are reinvested at the end of each year.

In a press release, Wong said “the effects of China’s post-pandemic reopening, the rise of ASEAN for China, plus one strategy and other geopolitical factors” have boosted potential trade flows between the two regions.

Although OCBC has seen economic growth slow in some countries in the region, Wong said she is confident it will be able to capture growth as it “gets our act together”.

Signage of Oversea-Chinese Banking Corp. (OCBC) at the OCBC Center in Singapore, on Wednesday 3 August 2022.

Edwin Koo | Bloomberg | Getty Images

This will be achieved by improving how it engages with customers digitally, as well as improving the way the bank captures customers and businesses, she said, without offering further details.

She also pointed out that OCBC and its subsidiaries serve the seven largest markets in ASEAN and can rely on a presence in 17 cities in the Greater China region, including Hong Kong, Macau and Taiwan, as well as a partnership with Bank of Ningbo. .

Outlook for 2023

Asked about the bank’s outlook for the next half of 2023, Wong said it would be “probably quite stable”.

It said the high-interest-rate environment helped its interest income, even as fee income fell as investors held off investing due to an uncertain economic environment.

But OCBC has other revenue streams that could contribute to growth, such as insurance income, Wong said.

However, she also admitted that there could be uncertainty as interest rates could potentially stay at current levels or go “a bit higher”.

As a result, OCBC will have to pay attention to whether its loan portfolio may be affected by long-term high interest rates. If rates continue to be high, customers are likely to be “a bit sidelined in terms of their investment activities,” Wong pointed out.

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As a regional bank – the second largest in Southeast Asia – OCBC also saw some money come in from the collapse of US regional banks earlier this year.

“Whenever there is some change, some weakness in certain parts of the industry, there is a flight to quality. So as a highly rated bank sitting in Asia, we see some of that new money coming in,” she said.

However, the aim is not only to make the money come in, but to make the money stay with OCBC.

To that, Wong stressed, the bank needs to ask itself: “Are there lessons? How will this actually affect customers? Are we equipped to serve customers when the money comes in?”

OCBC shares are up nearly 9% over the past 12 months and closed at S$12.30 on Monday.

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