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Many things can remind us of Singapore. It could be our distinctive Singaporean English (Singlish), the familiarity and diversity of our local foods, or even the numerous times we need to ballot for something important in our lives (primary school enrolment, BTO flat applications, NDP tickets!). Local companies can also serve as reminders of Singapore. Among the biggest companies in Singapore, a trio of local banks—DBS, OCBC, and UOB—stand out prominently. These three banks currently have the highest market capitalisation on the Singapore Exchange (SGX). Not only do they dominate the local banking sector, but they are also ranked as the top three largest banks in Southeast Asia in terms of total assets. In this article, which is part of our DollarsAndSense heritage series, we explore how a small country like Singapore managed to produce banking giants. In particular, we will focus on OCBC – the oldest local bank in Singapore. OCBC was established in 1932 from the merger of three local banks: Chinese Commercial Bank, Ho Hong Bank, and Oversea-Chinese Bank. The Chinese Commercial Bank, the oldest of the three, was founded in 1912 – more than 100 years ago. OCBC’s establishment in 1932 was followed by UOB’s founding a few years later, in 1935. DBS, the youngest of the three, was established in 1968. Originally part of the Economic Development Board (EDB), its initials then stood for Development Bank of Singapore. As Singapore’s economy flourished post-independence, these three banks naturally grew alongside it, providing essential banking services to both businesses and individuals alike. In the banking industry, size matters. Compared to the robust banking environment we see today, Singapore’s banking landscape was much more fragmented in the past. While there were many banks in Singapore back then, they were generally smaller and held only a small share of the domestic market. To grow to their current size, mergers and acquisitions were instrumental. The idea behind such M&As in the banking industry is that larger banks with substantial capital and customer bases can be more competitive. This allows them to effectively serve not only their local market across different banking verticals but also an increasingly global customer base. For example, if a local SME based in Singapore is using OCBC for their banking requirements, they may also want to use OCBC services when they expand their operations to Malaysia. In 1972, OCBC acquired Four Seas Communication Bank, originally founded in 1907. Four Seas Communication Bank maintained autonomy in its daily operations until it was fully integrated under the OCBC umbrella by 1998. In 1998, Keppel Bank acquired Tat Lee Bank through a share swap, creating Singapore’s fifth-largest bank, Keppel TatLee Bank. In 2001, OCBC acquired Keppel TatLee, which was then the smallest of the five local banks. Further expanding its footprint, OCBC acquired ING Asia Private Bank, in 2009. Following this acquisition, OCBC launched the Bank of Singapore as a private banking subsidiary, catering to high net worth individuals and wealthy families across Asia, Greater China, the Indian subcontinent and other international markets. While Singapore’s banking sector may have grown quickly in tandem with its fast-growing economy, it was nevertheless a small market given the size of our country. For local banks like OCBC to achieve faster growth, it was essential to expand beyond Singapore and pursue opportunities in overseas markets. OCBC has four core markets: Singapore, Malaysia, Indonesia, and Greater China. These regions are critical for OCBC’s strategy to expand its footprint and capitalise on the sizable opportunities presented by flows between ASEAN and Greater China. Take Indonesia for example. OCBC acquired a 22.5% stake in Bank NISP (now known as OCBC Indonesia) in 2004, increasing it to 85.1% in 2011. As of FY2023, Indonesia accounts for about 8% of OCBC’s total income, approximately S$1.035 billion. Strategic acquisitions have continued to be important in this market, even up to present day. To further build up its capabilities, on 1 May 2024, OCBC completed the acquisition of PT Bank Commonwealth (PTBC), adding over 1.2 million PTBC customers to OCBC Indonesia. PTBC’s complementary base – there is little overlap in client relationships with OCBC Indonesia – and its demonstrated capabilities in wealth management and auto joint financing were attractive. Strategic acquisitions were carried out in other markets as well. One was particularly noteworthy: in Greater China, OCBC acquired Wing Hang Bank in 2014, gaining access to a strong offshore yuan funding base and expanding its presence in Hong Kong, Macau, and the Pearl River Delta. At that time, it had been the largest cross-border bank deal within Asia (ex Japan) in the past decade. This has contributed to OCBC’s performance in the region. As of FY2023, Greater China accounts for about 13% of OCBC’s total income, approximately S$1.774 billion. Just as strategic acquisitions have allowed OCBC to diversify its business and position itself as a key connector between ASEAN and Greater China, they are just one piece of the overall strategy. Ensuring that all markets work together to support customers is important. Last year, OCBC unveiled a unified brand as a sign of its commitment to its customers – that when they bank with OCBC Group, they have the collective strength of the Group supporting them seamlessly across markets. These have helped unlock opportunities and drive growth, making OCBC the second largest financial services group in Southeast Asia by assets. By tapping into new customer bases and targeting high-growth regions, OCBC enhances its competitive edge and sustains growth in the global economy. The evolution of OCBC from its early days to becoming one of the largest banks in Southeast Asia is a story of foresight and resilience. In many ways, the growth of Singapore’s local banks since our nation’s independence mirrors the economic development we have experienced as a country. They share a history with Singapore, thriving during both periods of economic prosperity while also enduring challenging times.