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Bank of Singapore set to notch record growth of up to 15%
BANK of Singapore is back on track to post double-digit growth for 2014, likely as much as 15 per cent, according to its outgoing chief executive, Renato de Guzman.
"This year we'll have record growth," said Mr de Guzman, who's better known as "Bing" to everyone in the private bank's headquarters. "We could end 2014 with AUM (assets under management) of US$52-53 billion," he told The Business Times in a recent interview. That would mean a gain of 13-15 per cent from 2013's US$46 billion AUM. As at Sept 30, the bank's AUM has already crossed US$51.1 billion, doubled from US$23 billion in January 2010 when BOS was launched.
In an earlier interview in March, Mr de Guzman had said that BOS, having completed its spring cleaning last year following three years of strong growth, was gunning for AUM growth of 15 per cent, almost double that of 2013. Its AUM rose 8 per cent in 2013 to US$46 billion - slower than the previous three years of double-digit gains, as the bank turned its attention to building up its infrastructure and weeding out clients whose AUM fell below US$1 million.
"I'm leaving on a high note - ticked all the right boxes," said the affable banker.
BOS announced last month that Mr de Guzman will retire on Jan 31 next year. The 64-year-old will remain at the bank as a senior adviser until the end of June to ensure a smooth transition. He will be succeeded by banking veteran Bahren Shaari, currently BOS' senior managing director and global marketing head of South-east Asia.
Mr de Guzman became head of the bank in January 2010, having helmed the former ING Asia Private Bank for 10 years before it was acquired by OCBC Bank, Singapore's second largest bank. "Under his leadership, he skilfully steered the renamed Bank of Singapore, rapidly expanding the regional management teams with highly qualified professionals and developing a leading product, research and advisory platform," BOS said.
The bank now has 1,300 staff, up from 1,200 last year.
The smooth transition belied a rocky patch at the beginning of the year. Then BOS was rocked by the departure of Yelandur Nagendra, head of the non-resident Indian (NRI) unit, who took with him a substantial number of staff, including the NRI chiefs in Hong Kong and Dubai, to J Safra Sarasin, a Swiss private bank.
"At the beginning of 2014, I was expecting a relatively peaceful pre-retirement but it turned out to be a challenging time as a key member of my team left," Mr de Guzman said. But the episode testified to the resilience of the leadership team, with senior managers chipping in to help, according to him.
There were some who wondered about the ability of non-Indian relationship managers (RM) serving NRI clients. But NRI clients were in fact impressed by the senior RMs who stepped in to service them, Mr de Guzman said.
"We had the ability to improvise, and were able to upgrade the service levels to clients," he said.
Today, the bank's NRI team is headed by Nikhil Advani in Singapore, Edward Chow in Hong Kong and Kirit Chauhan in Dubai. "It was unexpected, unwelcomed but turned out to be a good proof of the strength of our organisation in terms of our platform, value proposition and a good test of our banking model," Mr de Guzman said.
This year's strong AUM growth has also been accompanied by record profitability, he noted.
The strong financials give the bank the ability to meet challenges and sustain it through market volatility, Mr de Guzman added. And cost is coming down - the cost to income ratio is below the industry's average of 65 per cent.
OCBC's income from wealth management activities (comprising income from insurance, private banking, asset management, stockbroking and other wealth management products) climbed to a new record of S$1.68 billion in the first nine months of 2014, up 17 per cent.
Clients are drawn to BOS for several reasons, including it being Singapore-headquartered, and the strong AA- rating from Standard & Poor's of parent OCBC, according to Mr de Guzman. BOS also offers global capabilities via an open architecture platform, supported by a strong research team. This year, OCBC acquired Hong Kong's Wing Hang Bank, which has 95 branches in Hong Kong, Macau and China.
Does he wish BOS could have expanded via acquisition?
"Acquisition is always an option. OCBC has just acquired Wing Hang, there's so much to do," said Mr de Guzman. BOS' focus is to harness the group's deepening network across its core markets of Malaysia, Indonesia and Greater China, he said. "There's a lot of platforms to grow our business - no need to copy anyone in terms of strategy," he said. "You play to your strengths and continue to grow in your selected markets - Singapore, Malaysia, Indonesia and Greater China - where OCBC has strong presence and growth opportunity is big."
OCBC Malaysia is among Malaysia's largest foreign banks with 41 branches while Bank OCBC NISP is the seventh largest privately owned Indonesian bank with 339 branches.