Tan Teck Long became group chief executive of OCBC on 1 January 2026 with a rare combination of advantages. The bank had just completed three years of record or near-record performance, its common-equity capital ratio was comfortably above regulatory requirements and its franchises in banking, wealth management and insurance were producing diversified income. His predecessor, Helen Wong, had also spent years pushing the group towards a common regional identity.
The inheritance creates pressure as well as room to act. Interest rates have begun to fall across key markets, compressing the spread between what banks earn on assets and pay for funding. Geopolitical conflict and tariffs are changing trade routes and credit risks. Asian wealth continues to grow, but every major bank in Singapore and Hong Kong is competing for the same clients and relationship managers. Artificial intelligence promises better service and productivity while increasing technology, governance and cyber demands.
Tan’s answer is a strategy called The Next Frontier, built around four shifts: Asia, technology, net zero and franchise strength. The first quarter of 2026 offered early support. Net profit rose 5 per cent to S$1.97 billion even though net interest income fell 5 per cent. Record non-interest income, led by wealth, trading and insurance, more than offset part of the rate pressure. The result demonstrated what Tan is trying to build: an OCBC that can compound when the lending cycle is less favourable.
The first quarter exposed the new earnings equation
OCBC’s net interest margin fell 28 basis points from a year earlier to 1.76 per cent in the first quarter. Net interest income declined to S$2.22 billion despite a 10 per cent increase in average assets. That is the basic challenge facing Tan. Balance-sheet growth can cushion lower spreads, but chasing volume to replace margin is dangerous if underwriting weakens or returns on capital fall.
Non-interest income provided the counterweight. It increased 23 per cent to S$1.61 billion and represented more than 40 per cent of group income. Net fees rose 24 per cent, trading income increased 10 per cent and insurance income climbed 34 per cent. Wealth-management fees were particularly strong, rising 34 per cent, while wealth income across banking, insurance, asset management and stockbroking reached S$1.48 billion.
The mix matters because fee and insurance income can be less sensitive to policy rates, though it is not immune to markets. Wealth revenue depends on assets, activity and customer confidence. Trading income can be volatile. Insurance earnings reflect sales, investment performance and actuarial assumptions. Tan must make the sources repeatable enough to support the group through several interest-rate settings.
Costs rose 6 per cent as OCBC invested in people and technology, taking the cost-to-income ratio to 39.3 per cent. That remains efficient by international banking standards, but the direction deserves attention. The Next Frontier will be credible only if spending produces revenue, productivity or stronger risk management rather than adding a permanent layer of complexity.
Wealth is the clearest route beyond lending
Banking wealth-management assets under management stood at S$342 billion at the end of March, up 12 per cent from a year earlier, supported by net new money across client segments. OCBC can serve affluent customers through its premier-banking operations, high-net-worth clients through Bank of Singapore, and protection and savings needs through Great Eastern. That breadth is a structural advantage.
The opportunity is to capture more of each customer’s financial life rather than sell isolated products. Deposits can lead to investments, insurance, financing and estate planning. Corporate founders can become private-banking clients, while family relationships can support commercial opportunities. Tan’s One Group inheritance gives him the organisational basis for those connections.
Integration is harder than the diagram suggests. Customers expect specialist advice and open architecture, not a sales funnel designed around group products. Regulators require clear suitability and conduct standards. Data must move across entities only with appropriate consent and controls. Incentives that maximise one division can damage the long-term relationship.
OCBC’s plan to acquire HSBC’s wealth-management business in Indonesia adds scale to a market where the group already has a universal-bank presence. The portfolio includes assets under management and deposits, offering potential customer and funding synergies. The strategic fit is strong, but retention will determine value. Wealth clients and relationship managers can move quickly if service deteriorates during migration.
Asia flows are Tan’s home advantage
Tan led OCBC’s global wholesale bank before becoming chief executive, giving him direct experience of the corporate flows at the centre of the Asia shift. Under his leadership, the division increased income and profit strongly, expanded relationships linked to Greater China and ASEAN, and built specialist coverage in technology, media and telecommunications. He also chaired a strategic resilience group established to assess geopolitical change and new growth engines.
OCBC’s network across Singapore, Malaysia, Indonesia, Greater China and international financial centres allows it to follow companies as they diversify production, raise funding or manage currencies. The Johor-Singapore Special Economic Zone is a practical example. By the end of 2025, OCBC had committed more than RM15 billion in financing to businesses in Johor over less than two years, supporting manufacturing, property and data-centre activity.
The bank has also signed a partnership intended to facilitate up to S$17 billion of financing into priority sectors in the United Kingdom by 2030, while helping British companies expand into Singapore and Southeast Asia. This is not a retreat from the Asian focus. It is an attempt to make OCBC an intermediary between Asian capital and global opportunities.
Cross-border growth brings attractive fees and relationships, but it also introduces legal, currency and political risk. Supply chains can be reconfigured by tariffs or export controls. A loan that appears diversified geographically may still depend on one end market. Tan’s risk background, including a previous role as group chief risk officer at another regional bank, will be important as relationship ambitions increase.
AI must improve economics without weakening trust
The technology shift in Tan’s strategy is expressed through AI, digital and data capabilities. OCBC is using agentic systems in Bank of Singapore to automate source-of-wealth reports, reducing a process that could take days to about an hour. It has developed tokenised-bond infrastructure, a blockchain-based commercial-paper programme and research partnerships in quantum technology. In July 2026, the bank introduced digital avatars for personalised wealth engagement.
These initiatives are valuable only if they solve customer or operating problems. Faster source-of-wealth preparation can improve onboarding while maintaining controls. Better data can help advisers understand portfolio exposures. Tokenisation may reduce friction in issuance and settlement. The risk is to confuse technological novelty with economic advantage.
Banking AI carries strict obligations. A recommendation about investments or credit must be explainable, suitable and free from hidden discrimination. Customer data must remain protected. Fraudsters can use the same technology to create convincing impersonations, increasing the need for authentication. Models can also fail when market conditions move beyond their training data.
Tan must establish governance before scaling. Human accountability should remain clear, and productivity gains should be measured against the full cost of technology, cyber defence and control. OCBC’s brand rests on trust accumulated over more than a century. No efficiency gain justifies weakening it.
Insurance creates differentiation and complication
Great Eastern gives OCBC an insurance earnings stream that its Singapore banking peers do not replicate in the same form. In the first quarter of 2026, insurance income rose to S$409 million, while new business embedded value increased 31 per cent and the margin on new business improved. Insurance also supports the wealth proposition by connecting protection, retirement and investment needs.
OCBC increased its economic interest in Great Eastern through a voluntary offer in 2024, although the insurer’s shares remained a governance and listing issue after the public float fell below requirements. The strategic desire for closer integration must be balanced with the rights of minority shareholders and transparent capital allocation. The group should demonstrate that additional ownership produces customer, distribution or capital benefits rather than control for its own sake.
Insurance earnings can be sensitive to markets, interest rates, medical claims and actuarial assumptions. They diversify the bank, but they also make performance harder to interpret. Tan needs to explain the underlying drivers and ensure that capital is allocated across banking and insurance according to risk-adjusted returns.
Capital strength creates choices
OCBC ended March with a common-equity Tier 1 ratio of 17 per cent under the transitional Basel framework and 15.2 per cent on a fully phased-in basis. Customer deposits rose 10 per cent to S$444 billion, and the loans-to-deposits ratio was a conservative 77.2 per cent. The balance sheet gives Tan capacity to grow, invest and return capital.
The bank entered 2026 part-way through a S$2.5 billion capital-return plan involving special dividends and share buybacks. For 2025, it proposed ordinary and special dividends amounting to a 60 per cent total payout. Returning surplus capital is appropriate when organic needs and risk buffers are satisfied. The test is to avoid making distribution targets rigid when acquisition or credit conditions change.
Strong capital can also encourage marginal lending. Customer loans increased 9 per cent on a constant-currency basis to S$347 billion in the first quarter, with growth across industries and markets. Sustainable financing represented 17 per cent of loans. Tan must preserve pricing and underwriting discipline, particularly in sectors such as commercial property, digital infrastructure and transition projects where capital is abundant and assumptions can shift.
Credit costs are still benign, but the cycle is changing
OCBC’s non-performing loan ratio remained at 0.9 per cent for an eighth consecutive quarter, and coverage increased to 163 per cent. The bank set aside S$191 million of allowances for non-impaired assets in the first quarter, including management overlays for uncertainty. That prudence is significant because reported asset quality often looks strongest before economic stress appears in borrower performance.
Falling rates can ease debt-service pressure, but they may also reflect weaker growth. Tariffs and conflict can affect corporate cash flows through input costs, demand and logistics. Property exposures require attention as values and refinancing terms adjust. The group’s geographic diversification can spread risk, yet regional shocks can also travel through trade and capital markets.
Tan’s leadership will be judged partly by what OCBC declines to finance. Growth targets should not override concentration limits or collateral realism. AI-driven credit tools can improve monitoring, but they should support rather than replace experienced risk judgment, particularly when historical patterns no longer apply.
The organisation must operate as one group
Tan inherited the One Group strategy and has chosen to build on it rather than announce a clean break. That continuity is sensible. Banking transformations often lose value when a new chief executive changes language and structure before earlier investments mature. The Next Frontier refreshes priorities while retaining the logic of integrated banking, wealth and insurance.
Execution requires leaders to co-operate across entities and countries without weakening local accountability. OCBC made several senior appointments around the transition, including in risk, strategy and wholesale banking. Tan must turn those individuals into a management system with clear decision rights, shared data and consistent standards.
His own appointment followed an internal progression after joining OCBC in 2022. The short tenure before promotion makes the six-month transition period important. It allowed him to work alongside Wong and engage the board while assuming deputy-chief-executive responsibilities. The result should be continuity in risk culture with enough authority to change resource allocation.
What Tan must prove next
Tan has begun his tenure from a position of strength, and the first quarter showed that OCBC’s diversified franchise can offset lower lending margins. The bank produced record total and non-interest income, grew wealth assets, maintained a strong capital ratio and kept its non-performing loan ratio stable.
The next twelve to twenty-four months will establish whether those advantages can become a durable post-rate-cycle model. Wealth growth must come from net new money and deeper relationships rather than only markets. Indonesia integration must retain clients. AI spending must improve service and productivity under rigorous governance. Cross-border loan growth must preserve risk-adjusted returns. Capital distributions must remain subordinate to resilience.
OCBC’s distinctive proposition is breadth: a regional commercial bank, wealth manager and insurer connected across major Asian corridors. Breadth can create compounding relationships, or it can become organisational weight. Tan’s central job is to make each part strengthen the others while keeping the economics and accountability visible.
He inherited a bank that had already proved it could earn strongly when interest rates were supportive. The Next Frontier will be measured by whether OCBC can keep growing when rates contribute less, and whether Tan can do so without spending the capital and trust that make the opportunity possible.
