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OCBC’s growth drivers intact despite Trump’s trade tantrum; room to raise dividends

Goola Warden
Goola Warden8/27/2018 07:30 AM GMT+08  • 9 min read
OCBC’s growth drivers intact despite Trump’s trade tantrum; room to raise dividends
SINGAPORE (Aug 27): During a results briefing on Aug 6, Samuel Tsien, CEO of Oversea-Chinese Banking Corp, assured analysts and media that the bank’s long-term growth drivers remained intact in spite of US President Donald Trump’s trade tantrum. Tsie
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SINGAPORE (Aug 27): During a results briefing on Aug 6, Samuel Tsien, CEO of Oversea-Chinese Banking Corp, assured analysts and media that the bank’s long-term growth drivers remained intact in spite of US President Donald Trump’s trade tantrum. Tsien has identified four megatrends that continue to underpin the banking group’s growth strategy: (trade and investment) flows, China, wealth management and digitalisation (in no particular order).

Digitalisation appears to be bearing fruit for all three banks as viewed through the prism of their cost-to-income ratios, which fell q-o-q and y-o-y for OCBC and United Overseas Banking. OCBC’s CIR was the lowest among the three at 42.9% for 2QFY2018 versus 43.6% for UOB and 44.3% for DBS Group Holdings.

In a statement, OCBC says the average profitability of digital customers is 1.5 times higher than for non-digital customers. Also, the cross-sell ratio of digital versus non-digital customers is 2.7 versus 1.7. In addition, the percentage of digitally active customers is 47% of the bank’s two million retail customers.

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