HONG KONG (Reuters) - Oversea-Chinese Banking Corp Ltd (OCBC) plans to set up a wealth management business in China as part of a strategy to double its profit in five years in the country's so-called Greater Bay Area, its chief executive said.
The Greater Bay Area aims to bring together Hong Kong, Macau and nine southern Chinese cities to form a business powerhouse that will seek to rival other metropolitan megacity hubs and mimic the likes of Los Angeles, New York or Tokyo.
OCBC, Singapore's second-largest listed lender, expects the launch of the wealth management business and the expansion of its banking presence in the Greater Bay Area to be a "new growth driver" for the bank, CEO Samuel Tsien said.
The bank did not give a timeline for the launch, which will be subject to regulatory approvals.
These plans should help OCBC double its profit before tax in the Greater Bay Area to more than S$1 billion ($743 million) by 2023, Tsien told reporters in Hong Kong.
OCBC is also looking to raise its headcount by 40 percent to more than 4,200 in the area over the period, Tsien added.
OCBC, which counts Singapore, Malaysia and Indonesia as its main markets, already has a wholly owned banking unit in China with presence in cities including Shenzhen, Guangzhou and Zuhai, as well as bank branches in Hong Kong and Taiwan.
The gradual opening up of China's financial market worth trillions of dollars has enthused some overseas firms to bulk up their presence in the country in sectors ranging from insurance, asset management, wealth management and investment banking.
"We believe that China (wealth management) market in terms of product availability is quite limited. But we also believe it is a matter of people not being able to structure it in a way that private banking clients would like to have," Tsien said.
"The market is developing, there will be more and more products available and you will need banks to pull that together into a structured portfolio for the private banking clients."
China's onshore private wealth market has grown 12 percent since 2017 and is estimated to reach 159 trillion yuan ($25 trillion) this year, according to consultant BCG, making it the second-largest such market after the United States.
($1 = 6.4137 Chinese yuan)
(Reporting by Sumeet Chatterjee; Editing by Himani Sarkar)
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Updated Date: Jun 19, 2018 00:05 AM