OCBC explains market rationale for Wing Hang Bank acquisition

Bank positioning for Greater China expansion.

OCBC has struck an exclusivity agreement with Wing Hang Bank for the possible purchase of its shares, a move that should help OCBC build up its capabilities in the key Greater China market, said COCB Chief Financial Officer, Darren Tan.

“Greater China is one of our four core markets together with Singapore, Malaysia and Indonesia. We have been building capabilities and investing in these core markets for several years, and will continue to do so, taking a long term view towards growth opportunities in these regions. Greater China presents excellent prospects for OCBC as China increasingly becomes the driver of economic growth in the region, and its interconnectivity with the rest of Asia and the world in trade, wealth and capital flows have created significant business activities in the Greater China region. Its currency, the Yuan, is fast becoming an increasingly prominent currency for international trade settlement and financing.

Therefore, banking with businesses serving the China market onshore and offshore, and developing a customer franchise in Hong Kong, Macau (and Taiwan) to tap into the fast growing offshore yuan market have been a key focus for us."

In 2011, we set up a Greater China Business Council to follow the economic and regulatory developments in the Greater China region including the rules associated with the offshore yuan, and in 2012 we established the China Business Office in Singapore to focus on Chinese companies expanding outside of China. OCBC was the first Singapore bank to offer yuan certificate of deposit in Hong Kong thereby accessing the growing yuan fixed income market to support our growth in yuan denominated trade financing and loans. We further established our presence in Greater China when we opened our new headquarters for our China banking subsidiary in Shanghai on 12 September 2013."

Today, OCBC has 16 branches in China, covering nine cities and spanning four regions – Yangtze River Delta, Bohai Economic Rim, West China and Pearl River Delta. OCBC has a branch in Taiwan and one in Hong Kong. Our dedicated private bank, Bank of Singapore, operates a booking centre in Hong Kong. Both Taiwan and Hong Kong are important parts of our Greater China strategy, with Hong Kong being a de-facto gateway to China and the offshore yuan clearing hub playing a strategic role. We will continue to deepen and grow our presence in Greater China."