Can two quite different international private banking cultures be successfully subsumed into one rather old-fashioned retail and commercial bank – and thrive?
That is the question often asked about Bank of Singapore, created by Singapore’s OCBC a decade ago.
OCBC bought ING Asia Private Bank from its bailed-out Dutch parent in 2009, bolstering the subsidiary with the purchase of Barclays’ wealth businesses in Singapore and Hong Kong in 2016. It was an ambitious plan given the competition.
Singapore is an important centre for the top private banks – UBS, Credit Suisse, Citi and others – and is brimming with private bankers. How can Bank of Singapore compete with its domestic rival DBS, let alone such international names?
Another global crisis notwithstanding, the bank has been successful by some measures. It had assets under management of $113 billion on June 30, roughly double the level usually considered to constitute critical mass in this compliance-driven and tech-heavy, low-margin environment.
Total wealth management income – which, strictly speaking, covers Bank of Singapore and some other businesses in the broader OCBC empire such as insurance income and brokerage – amounted to $1.59 billion, accounting for 31% of group income in the first half, and 34% in the second quarter.
Because of the Covid-19 pandemic, assets and income are both down from December, although they have bounced a bit in the second quarter.
The top private banks don’t yet see Bank of Singapore as a competitor on a global scale, but they respect its position at a regional and local Singaporean level.
“We look at them as a serious local player who have done well,” says one figure at a leading global house.
But that, it seems, is not enough, for the bank appears to be going not only regional but global – and that’s a very big step for a southeast Asian name.
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