Oversea-Chinese Banking Corporation (OCBC) is the latest bank to announce new initiatives around the highly-anticipated Johor-Singapore Special Economic Zone (JS-SEZ) in an attempt to capture the rush of capital inflows.
On Dec 11, the Singapore bank said that it will set up a dedicated team of 25 bankers with 10 years of experience on average to support small and medium enterprises (SMEs) keen to grow their business in the zone.
15 bankers will be based in Singapore, and 10 in Malaysia, some of whom are already managing domestic investments on the ground, says Jeffrey Teoh, head of wholesale banking, OCBC Malaysia.
This news comes on the back of the bank’s familiarisation visits to Forest City and EcoWorld Business Park in Johor for 28 Singapore and Chinese mid-sized enterprises in the manufacturing sector on the same day. The event was co-organised with the Malaysian Investment Development Authority (MIDA).
Just a week earlier, the signing of the JS-SEZ deal, first inked through a memorandum of understanding in January 2024, was postponed to the new year. The signing was originally slated for September, and then December. This latest postponement was on the request of Singapore, as prime minister Lawrence Wong said that he had contracted Covid days before he was meant to meet Malaysia’s Anwar Ibrahim at the 11th Singapore-Malaysia Leaders’ Retreat.
Both parties are “in the midst of finding new dates”, according to a Dec 4 social media post by Wong, where he shared a photo of a fruit basket sent by Anwar and his wife.
See also: Deal or no deal? ‘Game-changer’ JS-SEZ delayed yet again
Yet, interest in doing business in the JS-SEZ has lasted besides the delay, says Lavanya Venkateswaran, senior Asean economist at OCBC at a media briefing on Dec 11.
Each major bank from Singapore and Malaysia have taken turns to host a JS-SEZ related event for their clients in the past few months. Just this September, three Malaysian banks co-organised the annual Invest Malaysia conference in Johor.
Seow Zhi Yuan, managing director of RMS Marine & Offshore Services, a marine services provider company with presence in China and Singapore, says that consolidation and price competition in Singapore is forcing SMEs such as himself to look at options.
See also: Malaysia, Singapore postpone economic zone deal to January
“And Johor, with or without the SEZ, becomes attractive,” says Seow. “I think the government of Malaysia and Johor, they’re doing good. So I think people in Singapore are feeling safer, and running business [in Johor] becomes more comfortable. It seems like a must do before we get eliminated.”
While OCBC’s Teoh recognises that “every other bank is also looking at the JS-SEZ”, OCBC’s “play” is bringing investments from outside of Asean into the JS-SEZ, and vice versa.
The bank says that many customers have shared that they are “almost forced out of China”, and as a result, need to come to new markets like Malaysia.
“So I think we stand a good chance to lead in this area, as to whether we will be able to get all the competition, I think that's yet to be seen,” says Teoh. “I think it's clear that it will provide a growth impetus for OCBC on a y-o-y basis."
