OCBC boosts pay, hires in wealth and tech

Singapore banks may not be able to match global firms on the pay front quite yet, but compensation at the local lenders is heading strongly upwards.

Pay per head at OCBC in 2021 – total employee expenditure (such as salaries and bonuses) divided by total end-December headcount – was up 9% on 2020 to S$98,283, according to figures calculated from the bank’s earnings results, which were announced on Wednesday.

This follows a 10% uptick in average pay at DBS.

OCBC’s operating expenses of S$4.76bn were 7% above last year, largely due to higher staff costs linked to headcount growth, as OCBC “continued to invest in the areas of digitalisation and wealth management to support our strategic priorities”.

DBS and UOB have also been hiring heavily in technology and wealth. Tech pay has been soaring across the Singapore finance sector as banks attempt to attract talent amid strong competition from expansionist tech giants like Google and ByteDance.

Meanwhile, OCBC’s net profit for 2021 was S$4.86bn, an increase of 35% from a year ago, underpinned by “strong growth in non-interest income and lower allowances, which offset a decline in net interest income amid a low interest rate environment”. However, OCBC posted a 14% decline in fourth-quarter profit due to higher expenses and lower trading income.

Employees in global wholesale banking at OCBC enjoyed a particularly strong year as profit before tax more than doubled to S$1.71bn from S$642m in 2020, “mainly attributable to broad-based income growth and significantly lower allowances”. The treasury and markets and consumer/private banking segments registered earnings declines.

This trend was also seen at UOB and DBS, whose wholesale banking and institutional banking divisions, respectively, outperformed other units. Across the industry, investment banks in Singapore made a record US$1bn in fees last year, largely through a 91.1% growth in advisory fees for completed M&A, according to data from Refinitiv.