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OCBC seeking partner for China securities business
[SINGAPORE] Oversea-Chinese Banking Corp (OCBC) is looking for a Chinese firm to team up with on a securities joint venture on the mainland, the latest foreign bank seeking to capitalise on the nation's financial-industry loosening.
Obtaining a Chinese securities license would allow OCBC to do asset management, investment banking and fund management business in the nation, chief executive officer Samuel Tsien said in an interview in Singapore this week. South-east Asia's second-biggest bank by assets is talking to various firms that have shown an interest in such a partnership, he said.
"We will prefer to partner with companies that have a larger franchise already" so OCBC can sell into its existing client base, Mr Tsien said, adding that the bank hasn't applied for a license yet.
Under President Xi Jinping, China is gradually taking steps to give foreign financial firms more access to the world's second-largest economy. That's prompted banks from Credit Suisse Group AG to JPMorgan Chase & Co to seek a piece of the more than US$40 trillion financial industry through controlling stakes in local ventures.
"For us, what we need is to be able to reach out to as many potential customers as we can" through a securities joint venture, Mr Tsien said. Without extensive branch networks or a digital presence in China, "it's very difficult for foreign banks to be able to reach out to them".
UBS in December became the first foreign bank to gain majority control of a Chinese securities joint venture under new rules. JPMorgan and Nomura Holdings Inc received their approvals last month.
Mr Tsien said OCBC is on track to achieve a goal of doubling pretax profit in China's Greater Bay Area to S$1 billion by 2023. "It's possible that we're able to beat that," he said.
China is embarking on a sweeping plan to combine nine cities in the Pearl River Delta with Hong Kong and Macau -- a region known as the Greater Bay Area - to create a financial and technology hub that could rival California's Silicon Valley. OCBC plans to boost technology spending and staff in the region, Mr Tsien said in June.
About 16 per cent of OCBC's revenue came from Greater China in 2018, compared with 58 per cent from Singapore in the same year, according to its annual report.