Oversea-Chinese Banking Corp. (OCBC) named Samuel Tsien as chief executive officer to replace David Conner, who will retire in April after a decade running what is now Singapore’s second-largest lender.
The change takes effect April 15, according to a statement to the Singapore exchange yesterday. Conner will remain as a non-executive board director. The bank also appointed Ching Wei Hong to the newly created position of chief operating officer.
Conner, 63, joined the lender as CEO in April 2002 and delivered core net income growth of 16 percent compounded annually from 2003 to 2010, the bank said. Under Conner, Oversea-Chinese agreed to buy ING Groep NV’s private banking business in Asia in October 2009 for $1.46 billion in cash, more than tripling the unit’s assets.
“David has done a very good job, he’s been there for some time and put in place a good team,” said Hugh Young, who helps manage $70 billion in Asian equities at Aberdeen Asset Management Asia Ltd., including shares in the bank. “Hopefully, it’ll be business as usual, he’ll be a hard act to replace.”
Oversea-Chinese fell 0.5 percent to S$8.21 as of 10:08 a.m. in Singapore trading. Before today, it gained 43 percent since Conner became CEO on April 15, 2002, compared with a 60 percent increase in the benchmark Straits Times Index (FSSTI) and outperforming domestic rivals DBS Group Holdings Ltd. and United Overseas Bank Ltd., which have risen 6.1 percent and 19 percent, respectively.
Tsien, 57, has run the lender’s global corporate bank since 2007. Before then, he spent 30 years with Bank of America Corp. and associated companies. He was president and chief executive officer of China Construction Bank (Asia) Corp., formerly known as Bank of America (Asia), according to the Singapore lender.
“We don’t know much about Samuel,” said Anand Pathmakanthan, a Singapore-based analyst at Nomura Holdings Inc. “For the moment, I don’t think he’ll do anything radical, but will continue on the present strategy, which includes building up the private bank and growing the Asean franchise.”
Bloomberg Markets ranked Oversea-Chinese as the strongest bank in the world among lenders with at least $100 billion in assets in its June 2011 issue. The ranking weighed and combined five measures, including Tier 1 capital compared with risk- weighted assets; non-performing assets compared with total assets; and efficiency, a comparison of costs against revenues.
Conner was paid S$7.48 million ($5.8 million), according to the bank’s 2010 annual report. Before joining the bank, Conner spent 25 years at Citibank NA, a unit of Citigroup Inc., in India, Japan and Singapore.
The CEO “has been associated with OCBC’s success,” Nomura’s Pathmakanthan said. “Improving the bank’s risk management is his primary achievement, followed by developing the deposit franchise and expanding the fee income base.”
Conner, who grew up in St. Louis, boosted the bank’s total assets by more than threefold to S$267 billion by Sept. 30, 2011, from the end of 2002, Chairman Cheong Choong Kong said in an internal memo to employees yesterday.
“It’s a shame, but you can’t have people in charge of companies forever,” said Young of Aberdeen Asset Management, which is the lender’s biggest institutional shareholder, according to data compiled by Bloomberg. “He’s had a good inning, and I can’t imagine there being a sea change on the policy front. It’s important to us that he’s not being replaced by someone from the outside.”
Conner led the acquisition of majority control of Singapore-based insurer Great Eastern Holdings Ltd. (GE) in 2004 and the purchase of a 22.5 percent stake in PT Bank NISP in Indonesia the same year. The bank now owns 87 percent and 85 percent, respectively, of the companies.
In December, Oversea-Chinese named Darren Tan Siew Peng as chief financial officer, replacing Soon Tit Koon, who retired. Tan was the bank’s deputy chief financial officer before the appointment.