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BOS eyes Southeast Asia expansion

The private bank's AUM has reached $116bn, which is only $1bn below its peak in December.
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Singapore-based OCBC Bank is looking to establish onshore private banking businesses in some markets in Southeast Asia, according to Samuel Tsien, the bank’s group CEO.

“So far, we do quite a bit of wealth management from Singapore, Hong Kong, Dubai and London, but in some of the Southeast Asian countries, we do not have a direct presence yet,” he said yesterday in a presentation of the bank’s third-quarter results.

“Under the Bank of Singapore (BOS) name (OCBC’s private banking business), we will consider establishing direct presences in some of these countries, of which we are doing business with them on an offshore basis, but domestic private banking is coming up strongly,” Tsien said.

He did not elaborate on the bank’s plans on where it is establishing an onshore business. However, he mentioned that he is seeing progress in Malaysia’s wealth management industry.

In Malaysia, OCBC has already established the BOS brand in the country – BOS Wealth Management – after BOS in Singapore fully acquired asset management firm Pacific Mutual Fund in November last year. Pacific Mutual was 70% owned by Lion Global Investors, the fund management subsidiary of OCBC, while Koperasi Angkatan Tentara Malaysia Berhad owned the remaining stake.

The principal activities of BOS Wealth Management in Malaysia are the establishment and management of unit trust funds, as well as the management of private investment mandates, according to the firm’s website. As of the end of October, the firm has 28 funds and managed RM 3bn ($720m) in assets on behalf of its unit trust investors and private mandate clients.

Tsient also noted that OCBC already has an onshore private banking presence in Indonesia, but under the OCBC NISP brand and not BOS.

“We used the OCBC NISP name to pursue private banking there.” According to the firm’s website, the OCBC NISP brand was formed in 2008.

OCBC established its private banking business in Indonesia in 2017, when Bank OCBC NISP, OCBC’s 85% owned subsidiary, obtained regulatory approval to establish a private banking unit to manage the wealth of Indonesians with AUM of at least $1m, as reported.

Elsewhere in Southeast Asia, Bank of Singapore has a representative office in the Philippines, according to the bank’s website. It doesn’t have an office in Thailand.

Outside of Asia, BOS expanded its Middle East footprint after entering a partnership with Doha Bank in August to provide wealth management solutions. In 2016, it was granted regulatory approval to operate a branch in the Dubai International Financial Centre.

In April last year, BOS launched its wealth management subsidiary in Europe, BOS Wealth Management Europe, which is headquartered in Luxembourg with a branch in London.

AUM up

BOS’ AUM was up 3% during the third quarter to $116bn from $113bn in June, driven by net new money and positive market valuations, according to Tsien.

“I would like to point out that $116bn is only $1bn dollar below the peak private banking AUM that we achieved in December last year,” he said.

Source: OCBC

The bank’s AUM went down to $104bn in March when the pandemic hit earlier this year, according to the firm’s first-quarter results. At the time, although the bank had positive net new money, it was offset by negative market actions, it said.

Wealth management income up

Tsien added that OCBC’s total wealth management income reached S$928m ($687.6m) during the third quarter, which was the highest quarterly wealth management income OCBC recorded since 2018.

Wealth management income includes income from OCBC’s insurance, asset management, stockbroking and private banking subsidiaries, the report noted.

“The contribution and the momentum of the wealth management sector [to OCBC’s overall business] have actually accelerated,” Tsien said.

During the first nine months, wealth management income accounted for 33% of OCBC’s total income, according to the report.

Source: OCBC

Tsien explained that total wealth management income was also driven by the affluent segment in Singapore, who are actively seeking for income and retirement solutions.

“Those that have accumulated wealth on their own because of past savings now have a desire to have a higher yield on their accumulated wealth, and they want to have more advise that the banks can provide them so that their return can be more sustainable and can prepare for their retirement,” he said.

Part of the Mark Allen Group.