Maybank Securities banking analyst Thilan Wickramasinghe says the China rule change on outbound direct investment (ODI) is unlikely to be too negative for the local banks. On June 10, JP Morgan said China’s Doc 837 has broad implications for net new money growth for banks over time.
Research done by UBS says China’s Doc 837 significantly increases compliance requirements and scrutiny on capital outflows. The regulations, which apply to mainland residents regardless of foreign residency status significantly raise compliance requirements in practical implementation. UBS noted that the regulation elevates previously fragmented supervision to the State Council level and establishes a new framework covering the entire investment process, including capital outflows, transaction structures, investment channels and filing requirements.
“The applicable basis of the regulation is "resident individual" status rather than nationality. Therefore, holding only Hong Kong or overseas resident status does not constitute a compliance ‘safe harbour’,” UBS says
Wikramasinghe says fears of slower wealth management growth from North Asia due to changes in Chinese outbound investment regulations for local banks are overdone. Onshore Chinese wealth is not a client segment for Singapore banks, he says.
Offshore capital, which is the key segment in North Asia, should be unaffected by the new rules. Singapore and Asean comprise the larger mix of AUM, Wikramasinghe writes in his report dated June 11.
According to the Maybank Securities report, in 2025, “North Asia originated 22% PBT for DBS, 18% OCBC and 7% UOB (normalised for one-off 4Q2026 provision).”
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Wikramasinghe says the Singapore banks have been expanding their North Asia wealth investments recently. “We understand the larger proportion of AUM is still from Singapore and SE Asia,” he adds. As he reads Doc 837, “the regulations appear targeted at closing unregulated outbound flows from China, rather than stopping all outbound wealth movements. The key policy objective seems to be bringing flows into approved and compliant channels. This is supportive of China’s own ambition of internationalizing the RMB, in our view.”
As such Maybank Securities' top pick is OCBC followed by DBS. “[Their] focus is on offshore Chinese wealth, including clients whose wealth is generated outside China, or who have businesses, assets or family offices in Hong Kong, Singapore or other overseas markets. Weakness creates entry opportunity,” the report says.
Wikramasasinghe prefers OCBC because it is delivering synergies under One OCBC. Its new strategy is shifting focus to Asean, which should further limit North Asia uncertainty, he says.
