Oversea-Chinese Banking Corp Limited Talks About Brexit and its Exposure to Europe

Oversea-Chinese Banking Corp Limited (SGX: O39), or OCBC for short, had its second-quarter earnings briefing recently.

Brexit and OCBC’s exposure to Europe were among the topics. C hief executive officer Samuel Tsien said that the OCBC had moved to shore up its liquidity in the second quarter in preparation for Brexit.

Earlier on, chief financial officer Darren Tan also gave some context to OCBC’s exposure to Europe. His focus was this slide:


Source: OCBC’s earnings presentation

Tan gave a brief take on OCBC’s exposure to Europe and United Kingdom (UK):

Our exposure to Europe and UK  amounted to less than 3% of our total assets as at end June 2016. Our loan exposure was $5.4 billion with the majority being extended in the UK to our network customers. Our other exposures of $7.4 billion was mostly short term placements with central banks and investment grade financial institutions.

For comparison, OCBC’s peer United Overseas Bank Ltd (SGX: U11) reported that its Europe and UK exposure was 2.4%.

At the moment, it’s too early to judge the impact of Brexit on companies with exposure to Europe. Formal talks on the UK’s exit from the European Union have not started . We will have wait to see what happens next, if at all.

In any case, OCBC has stated that its exposure to Europe is limited.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.