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Since OCBC’s acquisition of Hong Kong lender Wing Hang Bank in 2014, it has managed to realize synergies and significantly grow its Greater China business with the region’s earnings share tripling from six percent to nearly one-fifth.
Earnings contributions from Greater China grew from 208 million Singapore dollars ($150 million) in 2013-end (representing six percent of OCBC Group’s total earnings) to $748 million in 2018-end, now making up 19 percent of total earnings, according to figures released by the group last week.
Headline growth figures in this period include a more than tripling of operating profits, income and wealth management assets under management. Its total client base in the region across all banking segments grew a colossal 19 times from 28,000 to more than half a million.
OCBC credits a large part of its growth to the Wing Hang acquisition it made in 2014 for reported 38.4 billion Hong Kong dollars ($4.9 billion), which was since newly named OCBC Wing Hang.
OCBC Wing Hang’s profits grew from $257 million in 2014-end to $419 million in 2018-end, representing a 1.6-fold increase in the four full fiscal years since the acquisition. Whilst this lags behind the group’s overall Greater China growth, the bank notes that there are other synergies realized that are not necessarily reflected in the subsidiary alone.
According to the bank, it has managed to capitalize on economic growth in Greater China and the increased connectivity between North and Southeast Asia. Its access to a broader funding base led to an expansion of its product capabilities (OCBC Group’s loan assets grew 2.4 times from 2013-end to 2018-end).
