Having assumed the role of Group CFO in November 2022, what is your vision for Group Finance?

My immediate focus is to take stock of Group Finance as a whole and work out how we can play an effective strategic role in our refreshed Corporate Strategy to Excel for Sustainable Growth. There are three focal areas of priority.

Firstly, I would like to look at how Group Finance can reinforce our strengths, especially in our business analytics capabilities to better provide business insights and advisory to our colleagues across the bank. This is an important enabler to drive more efficient resource allocations (including people, technology and capital), and support all eight pillars of our Corporate Strategy to drive growth.

Secondly, I will strengthen our capital management and optimise the utilisation of capital resources. This will allow us to deliver long-term shareholder value, while leaving us with sufficient room to drive franchise growth and to explore opportunities for inorganic growth as they arise.

Last but not least, building up our people assets is important. That, of course, includes developing individual talents. But to really support our Corporate Strategy’s “One Group” approach, we need to first reinforce collaboration within our Division by finding ways to optimise our collective talents as “One Group Finance”. By doing so, we can better scale our expertise and foster innovation to be an enabler for the Group in achieving our Corporate Strategy.

OCBC reported record profits in 2022. How can this momentum be sustained?

We were able to manage the challenges of 2022 well in part because we have a diversified business comprising banking, wealth management and insurance. In particular, our well-positioned balance sheet has enabled us to benefit from the rapid rise in interest rates. Our results have been propelled by strong growth in net interest income, underpinned by asset growth and net interest margin expansion. Lower allowances from improving credit conditions and sound portfolio quality also lifted our earnings. These more than compensated for slower investment-related fee income amidst volatile and uncertain market conditions. Overall, while customer investment activity was more subdued, we were still able to attract and grow net new money inflows into our wealth management franchise. That is a very positive sign.

Our geographical diversification continued to be a plus for us as well. It is one of the key enablers for us to pursue growth in challenging and uncertain climates. Though we are headquartered in Singapore, a substantial proportion of our income comes from our key overseas markets like Greater China, Malaysia and Indonesia.

In the immediate future, as we continue to reshape our balance sheet, we are thinking about how we can consistently perform well even when interest rates are dropping. Ensuring the resilience of our portfolio quality so that we do not end up with high impairment charges is also foremost in our minds. This is especially so given the inflationary pressures and possibility of recessions in certain markets.

However, we are not just thinking about our next immediate steps, but planning for the medium to long-term too. While doing so, it is important to exercise efficient resource allocations and be able to reap benefits from our investments, and Group Finance plays a vital role in providing insights and advisory.

What impact will our net-zero commitment have on our business?

Sustainability is often seen as a balancing act and indeed, sometimes doing the right thing might come at the expense of short-term profits. But ultimately, we believe that organisations should choose to do good, and that we can still achieve consistently good returns by doing so.

Investors are now seeing sustainability as a must-have, not just good to have, and are focusing more on companies with responsible business practices. Apart from investors, rating agencies are also paying close attention. They are increasing their due diligence on our sustainability practices as part of their rating assessments for banks. We maintain regular communication with the rating agencies as well as with our investment community, to provide updates on our efforts and progress. As a result, we were included on the inaugural Steward Leadership 25 list and the FTSE4Good Index. Our net-zero commitment, and other efforts in the realm of sustainability, are vital to position us well for the future.