Helen Wong: «I am Cautiously Maintaining a Stable View»
OCBC CEO Helen Wong spoke about the risks and opportunities from the current macro environment of geopolitical uncertainty and tariffs, underlining the bank's plan to push ahead with its HK$1.5 billion investment plan.
While OCBC said in its first quarter results that it would maintain its financial targets, including a net interest margin of 2 percent, cost-income ratio in the low 40s and 20 to 25 basis points of credit costs, it said there would be challenges ahead under the current environment with an ongoing trade war, including to its aim of mid-single digit loan growth.
«I think the past two weeks are a bit more positive. I think it's quite positive to see that both US and China have good conversation,» commented OCBC CEO Helen Wong during a media briefing, referring to the recent trade deal between the world’s two largest economies that saw reduced tariffs. «I would say I am cautiously maintaining a stable view.»
The bank recently boosted its allowances for loans and other assets by 25 percent to S$212 million ($163 million) which includes S$94 million for impaired assets and S$118 million from changes in credit risk profiles and management overlays set aside for heightened uncertainties in the macroeconomic environment.
Greater China Investment Target
According to Wong, OCBC will proceed with its previously announced plan of investing HK$1.5 billion ($190 million) to enhance its digital platform and upgrade its offices in Hong Kong and Macau. Focus has thus far been placed on areas such as the bank’s data center, core system and its new Hong Kong office in the Kai Tak district.
«We have no plans to change our HK$1.5 billion investment. I think towards the end of this year, we will complete 50 percent of it,» Wong added.
Growth Opportunities
Despite risks from the trade war, which could re-escalate after the 90-day pause if further talks fall out, Wong is optimistic that there are other opportunities in the market, especially within Asia, such as shipping, technology, media and telecom, and real estate.
«We continue to see flow in between Greater China and ASEAN. We have, over the past two, three years, built ourselves to be in the situation where we can capture the flow much better,» Wong said.
Within OCBC’s Greater China business, its revenues in Hong Kong and Macau rose 14 percent year-on-year to HK$1.9 billion. This includes a 17 percent increase in collaboration revenues with ASEAN. Its private banking unit, Bank of Singapore, also saw Greater China assets under management and revenue grow 20 percent and 25 percent, respectively.
