OCBC is the most regionalised of the three local banks

REGIONAL AMBITIONS: Of the local banks, OCBC is the most diversified, with the broadest Asia footprint.


    Apr 09, 2014

    OCBC is the most regionalised of the three local banks

    THE annual reports of the three local banks can sometimes be pretty interesting, both in what is highlighted and what is tucked away.

    Of the three, OCBC Bank's chairman retained the position of being the highest paid among his peers, at $2.26 million, despite the bank being the smallest in terms of market capitalisation.

    What was somewhat unusual was the restraint shown by United Overseas Bank (UOB) - the combined pay of its two chairmen came to $1.68 million: two for less than the price of one as it did not even match what DBS Group's Peter Seah took home ($1.84 million).

    Tucked away in OCBC's report was that the board would be losing its only woman director, Ms Fang Ai Lian, who will not stand for re-election at the upcoming annual general meeting. OCBC then joins UOB in having only male directors.

    In this day and age, it's a crying shame that two major Singapore corporations - they are the sixth- and seventh-largest listed companies here - have no female representation at its highest ranks.

    Only 8.3 per cent of board directors at Singapore-listed companies are women, and 57 per cent of such companies have all-male boards, a recent study by the Diversity Task Force (DTF) to examine the state of gender diversity on boards and in senior management in Singapore found.

    The government-backed DTF was initiated in 2012 by then minister of state for social and family development Halimah Yacob, who was concerned about the under-representation of women in these positions. The DTF found that not only are women under-represented on boards, but that most companies do not feel the need to increase this representation further.

    It's strange that OCBC cannot find a suitable woman director when the group operates in some of the most heavily populated countries of the world.

    OCBC shows off its regional ambitions by the four cities featured on its annual-report cover - Singapore, Kuala Lumpur, Jakarta and Shanghai.

    Of the three local banks, it is the most diversified institution with the broadest geographic footprint in Asia. The regional strategy has been bolstered by this month's acquisition of Wing Hang Bank.

    Wing Hang, the eighth-largest bank in Hong Kong and sixth largest in Macau by total loans as at June 30 last year, will help OCBC build a Greater China presence.

    OCBC's non-Singapore loans make up more than half of group total, or 50.5 per cent. Total income from outside Singapore is 38 per cent of group, up from 37 per cent in 2012.

    Meanwhile, the tagline of DBS' annual-report cover this year, "Forging ahead in dynamic Asia", sounds rather modest, perhaps reflecting the group's failure to expand meaningfully outside Singapore. Still, it is more easily understood than 2012's "Present for the future".

    Last August, DBS had to let the agreement to acquire a majority stake in Indonesia's Bank Danamon lapse, 16 months after the announcement of the transaction. Chief executive Piyush Gupta said candidly that the failed bid has pushed its ambitions to expand in that country back by five years.

    Income contribution from the bank's key growth markets of China, Taiwan, India and Indonesia has increased, accounting for 14 per cent of group income, up from 11 per cent in 2009. In February 2010, at his first meeting with analysts, Mr Gupta laid out his roadmap for the bank, aiming for a revenue mix of 40:30:30 for Singapore, Greater China, South and South-east Asia in five years.

    Not long after that meeting, asked what he thought of his rival's roadmap, then UOB chairman Wee Cho Yaw said that he didn't think he needed one since he knows Singapore quite well.

    Singapore continues to be UOB's main focus. Its annual-report cover is again a painting, a tradition of featuring art since 2009 for shareholders to enjoy.

    This year's "Gazing mountain" by Tan Rui Rong was the winner of the silver award in the 2013 UOB Painting of the Year (Singapore) competition, now in its 32nd year.

    One wonders if Mr Wee is worried about UOB's position as the largest mortgage provider among the local banks amid a sluggish property market and softening prices. Its housing loan book at the end of last year of $50.5 billion trumps those of DBS ($49.15 billion) and OCBC ($42.08 billion).

    Still, when it comes to operating in the region, UOB has made decent progress. Non-Singapore income contributes 44 per cent to the group, up from 42 per cent the year before.

    Still, the winner of the most-regionalised-bank title is ... drum roll ... OCBC.