OCBC aims to grow SMI, consumer loans


BEING a foreign bank in Malaysia, which is limited to only 25 branches nationwide, OCBC Bank (M) Bhd needs to play its cards right when it comes to branch locations. 

Opening a branch office in Kepong has clearly revealed OCBC's strategy to become a community bank that serves the small- and medium-sized enterprises (SMEs) and mass consumers. 

The branch was formerly located in the Kuala Lumpur's city centre along Jalan Kasturi.  

Indeed, OCBC group is aiming to become the top three players in SMEs and consumer (including wealth management) markets in Malaysia and Singapore. 

“There are many SMIs (small-and medium-sized industries) here and in the nearby areas such as Sungai Buloh.  

“We want to expand our SMIs and consumer businesses,'' said OBCB Ltd group chief executive officer David P. Conner at the official opening of the bank's Kepong branch on Saturday. 

David P. Conner (right) and Albert Yeoh

Conner said OCBC Bank viewed the SMIs as the economy's major driving force that should not be ignored. He noted that certain “skills” were needed to manage the SMI loans.  

Of the total RM18bil loan assets in OCBC Bank Malaysia as at June 30, nearly 28% or RM5bil was for SMI borrowings.  

According to OCBC Bank Malaysia CEO Datuk Albert Yeoh, the bank has achieved a 10% loan growth year-to-date, compared with the industry's average of 5.3%. 

The new Kepong branch alone has already given out RM45mil in loans to nearby entrepreneurs and has received total deposits of RM35mil within four months. 

In line with the OCBC group's core strategy of seeking new horizons for growth, OCBC Bank is stepping up efforts to grab a share in consumer banking. It started to offer home loans and wealth management products two years ago. 

Those efforts are now reaping fruit.  

Mortgage loans achieved 24% growth last year. And Yeoh is confident that the bank's unit trust and bancassurance sales would double to RM2bil this year. “Our wealth management business has done well,'' Yeoh said. 

Knowing the restrictions faced by a foreign bank, OCBC Bank will capitalise on Great Eastern Holdings' extensive agency force in Malaysia as an alternative distribution channel.  

“Great Eastern, the largest life insurer in Malaysia and Singapore, has about 17,000 insurance agents available for us,'' Conner said. 

The OCBC group raised its stake in Great Eastern to 81% in July from 49% previously via a share swap scheme.  

The acquisition boosted the banking group's total assets to S$117bil, making it one of the largest financial institutions in the Singapore-Malaysia market in terms of assets. 

Not just that. With the addition of Great Eastern policyholder accounts, customer accounts for the OCBC group have instantly doubled to more than four million. 

Conner had also proudly pointed out that the Kepong branch only had a workforce of 28 staff - most of them would be deployed for frontline operations. “We have a very small back office operations here. All the processing jobs will be done in a central processing hub in Putrajaya,'' he said. The OCBC group was granted MSC-status two months ago.  

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