Awards for Excellence 2016
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If you register a new business in Singapore – and there is truly nowhere easier to do so – then within a matter of weeks you will get a call from OCBC offering to help. Every single person who files with the Accounting and Corporate Regulatory Authority is contacted, and it is commonplace for businesses to get access to funding within six months of signing the incorporation forms. Approvals take just a day, services are simple and targeted, and as a result OCBC supports one in two start-ups in the city state.
It’s an approach so early and apparently risky that it raises a number of questions, chiefly about defaults; but NPLs in the Business First Loan product, which serves start-ups from six months to two years, are just 1.87%, not far above the group-level figure.
The next question is whether it works, which from a bank perspective, it clearly does: OCBC’s SME business doubled its net profit between 2010 and 2015, with compound annual growth rates in revenue of 15% in Singapore and 19% in Indonesia, over that period. In 2015 deposits in this group went up 14% and cash revenues 25%.
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Linus Goh, OCBC |
Beyond the numbers, it is very clear (as it is at rival DBS) that SMEs have been identified as a vital engine of growth for the bank and made instrumental to its whole approach. SME excellence is what OCBC cares about and its executives – Tan Chor Sen, Eric Ong and Christie Chu – talk about it with considerable pride. It is helped by a grasp of technology potential for SMEs. Its new business banking mobile app is the first in the country to use biometric authentication, while its OCBC Pay Anyone service combines social media with peer-to-peer payment. In February it launched a new unit called The Open Vault to drive partnerships with fintech startups. OCBC’s head of global commercial banking Linus Goh is on the board of Spring Seeds, a government initiative to launch start-ups that will be vital: Singapore has lacked entrepreneurship for a generation and is trying to boost it now as a national priority.
On top of that, the system works regionally, growing fast in Indonesia, Malaysia and increasingly in frontier Myanmar, fertile ground for a well-thought-out early-stage support business.
