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Rate cycle should lift local banks’ earnings despite diverging strategies

Goola Warden
Goola Warden9/3/2018 07:30 AM GMT+08  • 10 min read
Rate cycle should lift local banks’ earnings despite diverging strategies
SINGAPORE (Sept 3): All three local banks offer investors something different as they capture separate niches for themselves in geography, digitalisation and wealth management. Their geographies look decidedly different and all three have carved out segm
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SINGAPORE (Sept 3): All three local banks offer investors something different as they capture separate niches for themselves in geography, digitalisation and wealth management. Their geographies look decidedly different and all three have carved out segments in wealth management. There may be less differentiation in their digital strategies, as all three have set up innovation labs and are testing biometrics, artificial intelligence (AI), machine learning and, to an extent, distributed ledger technology. Cashless payments are now par for the course in any bank offering, as are e-wealth offerings.

Geographically, this year, United Overseas Bank announced that it had opened its first fully-owned subsidiary in Vietnam. This is the bank’s third country in the so-called Mekong region, where it has a presence. In 2014, both UOB and Oversea-Chinese Banking Corp were granted a Foreign Bank Licence by the Central Bank of Myanmar. Both banks opened their first Yangon branches after obtaining the licence in 2015. UOB has a growing presence in Thailand. The two frontier markets where it does not have a presence are Laos and Cambodia.

In 2014, OCBC completed the acquisition of Wing Hang Bank in Hong Kong. It has since articulated the importance of the Greater Bay Area in the Pearl River Delta and the flow business, that is, trade and investment flows across Southeast Asia from China.

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