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OCBC to rejig branch strategy after Covid-19 crisis
OCBC expects to rejig its branch network strategy after the Covid-19 pandemic because the rising adoption of digital-banking services has permanently diverted some traffic away from its branches, said OCBC chief executive officer Samuel Tsien on Monday.
With 22 of its 46 branches island-wide temporarily shut to comply with safe-distancing measures here, the bank recorded a broad-based surge in digital transaction volumes in services such as online trading, loan applications and PayNow transactions in the first quarter ended March 31.
Against this backdrop, OCBC will continue to invest in technology and digitalisation efforts in the areas of customer interaction, customer experience, internal processing and infrastructure, said Mr Tsien.
Speaking at OCBC’s virtual annual general meeting on Monday, he told shareholders that the bank expects the increased adoption of digital services to translate into higher net operating profit in the longer term, as a result of reduced manpower costs and fewer physical branches and offices being open in future.
“We do expect that the cost increase will be managed and the cost-income ratio of the bank would continue to improve,” he noted. To be clear, there have been no overhead cost savings so far due to the temporary closure of branches, as OCBC’s full network of ATMs remains operational and all affected branch staff have their full pay intact.
In Q1, the number of SME accounts opened digitally with OCBC grew 2.4 times from the figure a year ago. PayNow Corporate transactions jumped seven times, while SME loans applied digitally stood at 49 per cent, up from 30 per cent a year ago.
On the consumer banking side, the number of accounts opened digitally grew 1.9 times year on year in Q1. PayNow transactions grew 2.8 times, while online trading transactions more than doubled.
As at 4.40pm on Monday, OCBC shares were trading at S$8.81, up 0.9 per cent.