Potentially peaking rates and improving investor sentiments are expected to shift the split of wealth revenue at OCBC in favor of non-interest income, according to CEO Helen Wong.
Although OCBC posted a record net profit of S$5.7 billion ($4.2 billion) in 2022 due to a surge in interest income, the bank was not immune to broader market woes which caused a 16 percent drop in non-interest income. Wealth management fees fell 30 percent to $919 million.
«Last year was a volatile investment landscape. So, customers were generally cautious and they stayed on the sidelines,» said Sunny Quek, OCBC’s head of global consumer financial services, during a results briefing attended by finews.asia.
Income Split
In 2022, net interest income dominated the top line, accounting for nearly 66 percent of the S$11.7 billion in total annual income. In 2023, the balance could shift in favor of non-interest income, especially for wealth management fees, as interest rates peak and risk appetite improves.
According to OCBC group CEO Helen Wong, non-interest income as a share of overall income could grow, especially if market confidence seen in the last couple of months persists.
Wealth Management Expansion
In addition to market improvements, OCBC also sees growth tailwinds from the expansion of its own business. Last year, it launched a private banking unit in Malaysia and in mainland China, it is strengthening its wealth management services while also hiring for the business.
The bank is also positive on the broader outlook with China’s reopening expected to support China-Southeast Asia trade and investment flows.
