Overseas-Chinese Banking Corporation Limited (SGX:O39), or OCBC, held its annual general meeting (AGM) for the financial year ended 31 December 2021 (i.e. FY2021) earlier this afternoon.
As I was pre-occupied with other work, I was only able to attend the second part of the meeting (I missed out on CEO Ms Helen Wong’s presentation, and hence there’s no summary on that – my apologies) – which was the live Q&A session, as well as the voting of the 10 resolutions, both of which you can read about in this post:
Responses by Management to Questions Posed by AGM Attendees
- A shareholder sought for updates on OCBC’s businesses in Hong Kong (Wing Hang) and China (Bank of Ningbo), and on business slowdowns due to lockdowns in China as a result of the country’s ‘Zero Covid’ strategy. In response, Ms Wong updated that operations of Wing Hang and OCBC Hong Kong since been integrated, with both businesses coming under one management to strengthen its operations, and capability to serve its customers. With regard to the slowdown of businesses in China, Ms Wong expressed her confidence that in the longer term, China is still a key growth engine for the global economy.
- With the current rising inflation environment, a shareholder wanted to know if the bank’s non-performing loans ratio will be impacted, to which Ms Wong reassured that the bank have been constantly monitoring its credit and asset portfolio, and that there’s no systemic risk at the moment. That said, she added that the bank will continue to remain prudent, and at the same time be agile and proactive in their risk management.
- Pertaining to a question relating to the bank’s ability to achieve a sustainable loan growth, Ms Wong reaffirmed that it is important for the bank to continue to provide support to its customers as it grows, but in a manner that suits its risk assessment, as well as its overall execution strategy.
- On another question relating the bank’s organic and/or inorganic growth ahead, Ms Wong shared the bank’s 3-year strategy (2022 – 2024) refresh to drive growth and reinforce core strengths (which focuses on its 4 growth priorities to capture regional trade, investment, and wealth flows, as well as accelerate investments in transformation, digitalisation, and people assets.) She further added that the bank is open to opportunities to grow inorganically – but they must be in-line with its overall strategy, focus (on the 3 pillars in banking, wealth management, and insurance), and at the same time, be in the 4 geographical locations they are focused in (Singapore, Malaysia, Indonesia, and Greater China.)
- With the decreasing treasury bond yield, a shareholder wanted to know if it will have a material impact to the bank. While Ms Wong said that it will have some impact on the bank’s investment portfolio (which is open to mark-to-market), but on the whole, their portfolio is generally of a very high credit quality. She also shared that the bank will also be using interest rate hedges so that its portfolio remains managed in a manner that is according to its policies.
- A fellow shareholder wanted to know whether the bank have any plans to unlock the values of the properties that they have, which Ms Wong explained there are policies guided by the Board on this. She further added that a lot of the properties are currently being used by the bank for its operations, and that properties which are not used have been disposed, and disclosures were made available in their annual report.
- Another shareholder sought for the management’s clarification on why staff cost for the year went up by 10%, even though staff strength was up only by 0.27%. In response, Ms Wong said that the costs were due to upskilling, as well as in the annual salary increment of their staffs. Additionally, the bank also added more wealth management and IT staffs, and they cost more due to their specialties. At the same time, there was also the absence of the Jobs Support Scheme provided by the Government this year – all of them contributed to the increase in staff cost for the year.
- On whether or not OCBC intends to be more aggressive in terms of inorganic growth (along the scales of what the other 2 Singapore banks have done), Ms Wong said that compared to the other 2 Singapore banks, OCBC competes differently, and are also in different markets.
- Responding to a question on whether there are plans for OCBC to expand its market share in Indonesia, Ms Wong said that the bank is currently one of the “Top 10” in the country, and that they have strengthened their capabilities, talent pool, and products over the years. Additionally, the bank have also been moving up in terms of ranking in its loan portfolio and deposit in the country. Moving forward, Ms Wong said that the bank will continue to work closely with its NISP entity.
- A shareholder was concerned about whether OCBC have plans to downsize the number of physical branches, considering that there are many customers who are not tech-savvy (and hence may encounter difficulty in performing banking operations digitally.) In response, Ms Wong stressed that all customers (from all walks of life) are important to the bank, and that the bank is in fact, looking at expanding its physical presence to better reach out and serve its customers. At the same time, she also highlighted the need to continue with their digitalisation plans for to better cater to customers who prefer to manage their wealth digitally.
Results of Resolution Put to Vote during the AGM
- Ordinary Resolution 1, which is on the adoption of Directors’ statement and audited financial statements for the financial year ended 31 December 2021 and Auditor’s report, was passed with 100.0% of the votes for, and 0.00% against.
- Ordinary Resolution 2(a), which is on the re-election of Mr Ooi Sang Huang, was passed with 74.76% of the votes for, and 25.24% of the votes against.
- Ordinary Resolution 2(b), which is on the re-election of Mr Koh Beng Seng, was passed with 85.95% of the votes for, and 14.05% of the votes against.
- Ordinary Resolution 2(c), which is on the re-election of Ms Christina Hon Kwee Fong (Christina Ong), was passed with 74.41% of the votes for, and 25.59% of the votes against.
- Ordinary Resolution 2(d), which is on the re-election of Mr Wee Joo Yeow, was passed with 85.41% of the votes for, and 14.59% of the votes against.
- Ordinary Resolution 3(a), which is on the re-election of Ms Chong Chuan Neo, was passed with 99.76% of the votes for, and 0.24% of the votes against.
- Ordinary Resolution 3(b), which is on the re-election of Mr Lee Kok Keng Andrew, was passed with 99.89% of the votes for, and 0.11% of the votes against.
- Ordinary Resolution 4, which is on the approval of final one-tier tax exempt dividend, was passed with 99.99% of the votes for, and 0.01% of the votes against.
- Ordinary Resolution 5(a), which is on the approval of amount proposed as Directors’ renumeration, was passed with 96.89% of the votes for, and 3.11% of the votes against.
- Ordinary Resolution 5(b), which is on the approval of allotment and issue of ordinary shares to the non-executive Directors, was passed with 98.86% of the votes for, and 1.14% of the votes against.
- Ordinary Resolution 6, which is on the re-appointment of Auditor and authorisation for Directors to fix its renumeration, was passed with 99.50% of the votes for, and 0.50% of the votes against.
- Ordinary Resolution 7, which is on the authority to issue ordinary shares, and make or grant instruments convertible into ordinary shares, was passed with 92.36% of the votes for, and 7.64% of the votes against.
- Ordinary Resolution 8, which is on the authority to (i) allot and issue ordinary shares under the OCBC Share Option Scheme 2001; (ii) grant rights to acquire and allot and issue ordinary shares under the OCBC Employee Share Purchase Plan; and/or (iii) grant awards and allot and issue ordinary shares under the OCBC Deferred Share Plan 2021, was passed with 81.21% of the votes for, and 18.79% of the votes against.
- Ordinary Resolution 9, which is on the authority to allot and issue ordinary shares pursuant to the OCBC Scrip Dividend Scheme, was passed with 98.67% of the votes for, and 1.33% of the votes against.
- Ordinary Resolution 10, which is on the approval of renewal of the Share Purchase Mandate, was passed with 99.99% of the votes for, and 0.01% of the votes against.
Disclaimer: At the time of writing, I am a shareholder of Overseas-Chinese Banking Corporation Limited.
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