OCBC-GE: We aim to continue to drive synergy and collaboration
WE thank Hwang Soo Jin for his feedback, “OCBC shouldn’t absorb Great Eastern entirely” (BT, May 7). OCBC is committed to creating sustainable value for all our stakeholders.
From the perspective of the overall OCBC Group, we remain focused on executing our corporate strategy to drive growth, leveraging on our One Group capabilities across OCBC’s key business pillars of banking, wealth management and insurance. Great Eastern Holdings (GEH) is the strategic pillar under insurance. OCBC’s diversified and integrated business franchise has enabled the group to deliver sustainable and resilient growth over the years.
The close collaboration between OCBC and GEH has consistently positioned us among the top two in bancassurance sales in Singapore over the years. GEH has the biggest agency force in Singapore and Malaysia combined, with a broad customer base of more than 16 million policyholders. It also has the largest market share of life insurance sales in Singapore and Malaysia. GEH strengthens the competitive edge of OCBC’s wealth management business through providing investment, insurance and estate planning solutions, and this edge is further augmented by GEH’s ability to customise suitable products for OCBC’s customers.
GEH provides diversification to OCBC’s earnings base to deliver balanced earnings growth through economic cycles for stakeholders. GEH contributed an average of S$700 million annually in net profit to OCBC over the past 10 years, which translates to an average of about 15 per cent of OCBC’s yearly net profit over this period.
Going forward, we aim to continue to drive synergy and collaboration, such as integrating customer journeys and increasing cross-sell through data analytics.
The group adopts a comprehensive and integrated risk management approach. As a regulated entity, GEH discloses its risk management framework and practices, and appropriately aligns these with the group’s risk standards. In addition, the group maintains a strong capital position to buffer for uncertainties and to support growth.
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Recognising the interconnected nature of risks, as a group, we conduct cross-functional assessments of risk, and utilise a range of stress-testing and scenario analyses to evaluate the potential impact of plausible risk factors to the group’s earnings, capital, liquidity, customer segments, and obligations. These impacts are taken into consideration in shaping our overall risk strategies and contingency plans.
Our robust risk management and capital management approaches are reflected in our sound capital, funding and liquidity regulatory ratios. Both OCBC and GEH have strong credit ratings. OCBC is one of the world’s most highly-rated banks, with Aa1 by Moody’s and AA- by both Fitch and S&P. Similarly, GEH’s credit rating by S&P of AA- places it among the highest for Asian life insurance companies.
We will continue to focus on sustainable long-term growth, balanced with prudent risk management, to maximise value for all our stakeholders.
Collins Chin head, Investor Relations OCBC
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