OCBC's Indonesia loans exceed UOB's by a close 0.4%.
OCBC was more aggressive in Indonesia in 2010 than UOB. Whilst Indonesia loans account for 3.6% of UOB’s overall loan book, the corresponding ratio for OCBC is a close 4%. We noted that OCBC had expanded its Indonesia loan and deposit base more aggressively in 2010. For example, Bank OCBC NISP recorded2010 loan growth of 28%, which was ahead of UOB Indonesia’s 18%. Stronger deposit expansion for Bank OCBC NISP has helped to keep Bank OCBC NISP’s loan deposit ratio lower than its peer.
Both OCBC and UOB have high targets fortheir Indonesia operations. Going forward, both banks intend to further expand their portfolio aggressively in Indonesia.
UOBI’s commercial loans currently account for 30% share of total loans, and UOBI targets to grow loans in this segment by 50% YoY in 2011. Given the high loan deposit ratio of 97%, UOBI will also grow its savings deposit to fund its asset growth.
OCBC NISP targets for 25-30% loan expansion for 2011. OCBC indicated that their focus is on the SME business. As OCBC NISP has a lower loan deposit ratio of 78%, there is less urgency to drive deposits, although management indicated that they will still focus on CASA growth.
We expect the growth rate for both these Indonesian bank subsidiaries to be quite similar going forward. They will both contribute to the global loan growth for their respective bank groups.
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