OCBC - CGS-CIMB Research 2021-01-09: A Fresh Perspective

OVERSEA-CHINESE BANKING CORP (SGX:O39)

OCBC - A Fresh Perspective

Helen Wong will be taking the helm as group CEO of OCBC (SGX:O39) from 15 Apr 2021. She succeeds Samuel Tsien, who headed the bank for the past 9 years.
Ms. Wong returned to OCBC in Feb 20 as deputy president and head of Global Wholesale Banking, following a career-long foray in Greater China.
Reiterate ADD. We believe that Ms. Wong’s appointment will bring value to OCBC’s regional franchise focus, enhancing long-term share price prospects.

OCBC announced the appointment of Ms. Helen Wong as group CEO. Ms. Wong will be taking over the helm from Mr. Samuel Tsien, who will be entering retirement, having been with the bank for 14 years, including nine as group CEO.
Ms. Wong had returned to OCBC in Feb 20 as deputy president and head of Global Wholesale Banking. Starting off her banking career in OCBC in 1984 as its first China Desk manager, Ms. Wong went on to work in other banks in Hong Kong, before joining HSBC in 1992. Her experience spanned investment and corporate banking, debt capital markets, as well as relationship management of Hong Kong and Chinese corporates. Her last position in HSBC was chief executive, Greater China, where she oversaw the bank’s business in Mainland China, Hong Kong, Macau and Taiwan. Ms. Wong served as the chairman of the Hong Kong Association of Banks in 2015.
We are positive on Ms. Wong adding immense value to OCBC, especially given the overlap of her expertise in navigating Greater China and the bank’s strategy of strengthening its franchise in this region, and see prospects of long-term share price enhancement under her management.

In recent years, Mr. Tsien emphasised OCBC’s strategy in expanding into Greater China, given its vast growth potential, most notably via the acquisition of Hong Kong’s Wing Hang Bank in 2014. Growth of the bank’s wealth management franchise was similarly a focus as Mr. Tsien manoeuvred Bank of Singapore’s acquisition of Barclay’s wealth and investment management business and OCBC’s purchase of National Australia Bank’s retail and wealth business, both in Singapore and Hong Kong.
As a result, OCBC’s Greater China loan book expanded, from S$17.4bn (12% of group loans) and ~7% of PBT in 2012, to S$67.3bn (25% of group loans) and ~19% of PBT in 2Q20. In turn, wealth management income rose from S$1.8bn in 2012 to S$3.4bn in 2019.
We expect OCBC to further leverage on its regional connectivity for growth, aiding the bank’s mainland clients in expanding their businesses in South East Asia and vice-versa.
See OCBC Share Price; OCBC Target Price; OCBC Analyst Reports; OCBC Dividend History; OCBC Announcements; OCBC Latest News.

Andrea CHOONG CGS-CIMB Research | LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2021-01-09

SGX Stock Analyst Report ADD MAINTAIN ADD 12.520 SAME 12.520