OCBC said the move to lift its stake in China's Bank of Ningbo and its proposed acquisition of Wing Hang Bank in Hong Kong are part of a plan to boost its foothold in key regional economies.
Chief financial officer Darren Tan told The Straits Times yesterday that the Greater China region is one of its four core markets, along with Singapore, Malaysia and Indonesia.
"The acquisition of Wing Hang... helps us further entrench our presence, strategically positioning us to capture the large trade, investment and capital flows between North and South- east Asia," he said.
OCBC, Singapore's second largest lender, has received all the relevant regulatory approvals for the acquisition and sent key documents to shareholders on June 30. The first closing date for acceptance is July 29.
The bank is also raising its stake in China's Bank of Ningbo from 15.34 per cent to 20 per cent, the maximum permitted.
The transaction is expected to be completed in this quarter.
Mr Tan said the acquisition will increase the bank's access to yuan liquidity, supporting the growth of its yuan-denominated business, "in tandem with the internationalisation and growing importance of the currency".
"There are also substantial opportunities for cross-selling our private banking and wealth management services to Wing Hang Bank's small and medium-sized enterprise entrepreneurs and affluent retail customers," he added.
Wing Hang may also "leverage [on OCBC's] regional platform, sales management and product expertise to give its customers access to a wider range of capabilities".
OCBC's partnership with Bank of Ningbo has been "instrumental" in enabling it to gain deeper insights into the Chinese market since 2006, and has "resulted in collaboration in many areas such as products, customer referrals, business and talent development", Mr Tan added.
