The bank said branch closures during the Covid-19 «circuit breaker» has diverted traffic from physical branches.
A surge in the adoption of digital baking services is prompting OCBC to rethink its branch network strategy, while providing an impetus for the bank to continue its investment in technology and digitalization, said Samuel Tsien.
The bank is expecting a higher net operating profit in the longer term as a result of reduced manpower costs and fewer physical branches and offices being open in the future, the bank's chief executive officer said during its virtual annual general meeting on Monday.
«We do expect that the cost increase will be managed and the cost-income ratio of the bank would continue to improve,» Tsien said, noting that despite branch closures, the bank has not made overhead cost savings as its network of ATMs remains operational and continues to pay its branch staff in full.
Digital Take-Up
The bank closed 22 of its 46 branches in early April as part of Singapore's stricter social distancing measures to contain the spread of Covid-19. OCBC Securities, its wholly owned brokerage subsidiary, temporarily closed its Investors Hub and encouraged customers to use digital, email, and telephone channels as far as possible and minimize face-to-face interactions.
According to OCBC Bank, there has been a «huge acceleration» in the take up of digital services, from new account opening to day-to-day transactions to investments.
In the first quarter of the year, OCBC opened three times the number of SME accounts digitally compared to the year before, and saw a sevenfold increase in the number of PayNow Corporate transactions. The share of SME loans applied digitally has also grown to 49 percent, up from 30 percent in 2019.
