Quick takes: OCBC in transition

OCBC has appointed a seasoned hand in Greater China Helen Wong to be its new group chief executive officer from April 15.

Ms Wong, former chief executive of HSBC in Greater China, will be the bank's first female CEO and the first woman to head a Singapore bank.

The 59-year-old rejoined OCBC last year as deputy president and head of global wholesale banking after nearly three decades of banking experience in Greater China.

She will lead the charge at OCBC at a time when a global pandemic has left economies around the world reeling from the impact of Covid-19.

Here are some quick takes from analysts on OCBC's succession plan:

Greater China strategy

Citi analyst Robert Kong

"The appointment of Ms Wong to CEO likely shows OCBC's commitment to enhancing its Greater China franchise, a strategic pivot made in 2014 when OCBC acquired Wing Hang Bank."

"OCBC's management philosophy has been one of continuity and clear succession planning, and it is notable that one of Ms Wong's key roles upon joining OCBC in 2020 was to co-lead a taskforce to review the bank's strategy and operating model, something that would have taken on even more importance with enforced industry changes due to Covid-19. Investors likely will be curious whether the incoming CEO will have the same appetite for M&A/inorganic growth as Mr Tsien appeared to signal back in 2019."

CGS-CIMB analysts Andrea Choong and Lim Siew Khee

"We are positive on Ms Wong adding immense value to OCBC, especially given the overlap of her expertise in navigating Greater China and the bank's strategy of strengthening its franchise in this region, and see prospects of long-term share price enhancement under her management. We expect OCBC to further leverage on its regional connectivity for growth, aiding the bank's mainland clients in expanding their businesses in South-east Asia and vice- versa."

Jefferies analyst Krishna Guha

"Given (Ms Wong's) extensive experience and relationships in China, we expect the incoming CEO to further deepen the group's presence in China (especially in Greater Bay) and related cross-border business through organic and inorganic means. It will be interesting to see if the increased focus is accompanied by any shift in the current mix of geographies, operating businesses and industry focus of the group."

Sanford C Bernstein analyst Kevin Kwek

"The acquisition of Wing Hang Bank in Hong Kong (was) a bold move in line with (Mr Samuel Tsien's) firm belief in the potential of Greater China and OCBC's role in it, even if not all investors were in favour of it at the time. The picking of Helen Wong as his successor in fact signals OCBC's continued focus on Greater China. The challenge would be in proving the long-term value of this."

"While both DBS and OCBC have presence in China, OCBC's focus via Wing Hang Bank is more concentrated in Guangzhou and Shenzhen. If that area develops, OCBC is in a good position to tap on opportunities. Clearly Helen Wong is among the few senior bankers with the experience to do this, connecting businesses with South-east Asia."

Leadership transition

Citi analyst Robert Kong

"Mr Tsien (aged 66) follows predecessor David Conner in stepping down in the month of April, but his nine-year tenure as CEO (14 years in total at OCBC) is one year shorter. Our view was that Mr Tsien might remain CEO until April 2022 to guide OCBC through the post Covid-recovery."

Jefferies analyst Krishna Guha

"So far, the group has given fair amount of autonomy to the operating subsidiaries in the region. Ms Wong takes charge at the age of 59 years, similar to what Mr Tsien was when he became the group CEO. It should give the new management team enough runway but given the expectation of redefining group strategy and operating model, it remains to be seen how things are paced."

"Change in leadership is usually accompanied by some flux within the ranks of key executives. We will be watchful how the group manages this, especially with new digital banks looking to acquire senior banking talent. Finally, we look forward to hearing more about the prospects of improving group profitability and thinking around optimisation of capital levels. As of 2019, the group had the highest CET1 of 14.9 per cent and lowest return on equity of 11.4 per cent, compared to local peers."

First female CEO of a Singapore bank

Sanford C Bernstein analyst Kevin Kwek

"It bodes well for management representation obviously, and for investors who care about diversity. It should be mentioned that while she is the first female CEO of a Singapore bank, there are a number of female senior Singaporean bankers - a few in Standard Chartered, for instance, and Tan Su Shan and Chng Sok Hui at DBS."

Eye on Singapore banking peers

Citi analyst Robert Kong

"Investors have been questioning for some time whether DBS CEO Piyush Gupta (aged 60) is considering stepping down (joined DBS as CEO in November 2009). Aside from being several years younger than Mr Tsien, Mr Gupta recently took the step of adding to DBS's currently small India franchise by amalgamating Lakshmi Vilas Bank with DBS India, perhaps suggesting a greater commitment to large, high-growth emerging markets (India, Indonesia) for a DBS Group franchise that is still largely focused on Singapore and HK-China."

"Succession questions could also arise for UOB as Wee Ee Cheong (aged 68) has been CEO since April 2007 and deputy chairman since March 2000."

Sanford C Bernstein analyst Kevin Kwek

"Eyes will be on DBS and had been for some time. Appointments there over the last two years seemed aimed at grooming potential candidates for taking over. Timing is hard to predict though."

"Piyush Gupta at DBS is younger than Samuel Tsien, young enough to consider one more big challenge before retirement. He has already achieved a lot at DBS and, apart from seeing the bank through a still-difficult time, has done enough to pass on the baton over the next couple of years, if he wishes. My opinion is that the bank would be ready to see a change in that time frame too, although some investors will be concerned given the strong role he played over the last decade in the bank's development."