Overseas Chinese Banking Corporation (OCBC Bank)

[AlphaQuant]

Just go and look at the history of when DBS bought over HK's DAO HENG.

In M&A, management matters.

In DBS+DaoHeng, having American investment bankers driving a very expensive purchase of a HK commercial bank by a Sg commercial bank and then struggling to synergise operations (if any) led to a lot of pain. It was unfortunate that they were early to the Chinese game as all the RMB depeg+internationalisation efforts happened much later.

OCBC+WingHang has yet to play out but i think the interesting thing here is that Samuel Tsien is born in Shanghai and is a commercial banker with stints in CCB and BoA. So there's certain degree of familiarity with the culture fit. His vision for the purchase is also clear - to tap the 70+ branches in the Pearl Delta region for multiple uses - offshore RMB tapping and trade finance in what is perhaps the biggest story in our lifetime i.e. the emergence of China as the biggest economy in the world (though not on a per capita basis).

So far the market has punished OCBC and in a smaller way, DBS, for their exposure to China after all the "bubble bursting fears" and rewarded UOB's ASEAN focus thru organic growth. I note though, that OCBC's recent scrip dividend was 83% taken up - its ability to raise capital through Tier1 common stock should not be a big issue.