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21 October 2019
INVESTMENT

OCBC seeks more green loans to maintain lead in Southeast Asia

More banks in Asia are piling into environmentally-focused loans after a regional association last year agreed on principles that standardise disclosure rules.

BLOOMBERG/OCBC Bank


Oversea-Chinese Banking Corporation (OCBC) aims to expand its lending to environmentally friendly projects after this year building the environmentally-focused exposure to green loans among its Southeast Asian peers, reported Bloomberg.

Mike Ng, the Singapore OCBC’s Head of Structured and Sustainable Finance, said, “The bank has built a team of five to focus on sustainable financing after foraying into green loans last year and is looking to add bankers.”

While that should boost lending in the area, Asia has a lot of ground to make up. The region is said to be accounting for just 21 per cent or $217 billion, of the total $1.02 trillion of sustainable debt globally.

“There is much greater awareness now and a lot of pressure points on companies such as investors, non-government percent, consumers and regulators,” said Ng.

OCBC wants to build a sustainable finance portfolio of S$10 billion ($7.3 billion) by 2022 and is almost halfway toward that goal, the target will include lending classified as green loans as well as focused on environmental, social and governance initiatives as well as renewable energy, water and green transportation, added Ng.

Ng said that OCBC started extending green loans after the Asia Pacific Loan Market Association (APLMA) laid out principles aimed at increasing transparency on the use of proceeds and on the environmental impact of projects.

The bank’s largest publicly disclosed green loan this year came from its involvement in the consortium providing S$785 million to Frasers Property in March 2019. The five-year term loan under the APLMA framework involves refinancing for a new wing of the Northpoint City project in Singapore, which uses low emissivity double-glazed glass and recycled water for toilet flushing.

Globally, BNP Paribas, Sumitomo Mitsui Financial Group and Mizuho Financial Group top the league, with the total value of all such deals at $37 billion this year, reported Bloomberg.


RELATED STORIES: ASIA PACIFIC LOAN MARKET ASSOCIATION SUSTAINABLE FINANCING OVERSEA-CHINESE BANKING CORPORATION BNP PARIBAS SUMITOMO MITSUI FINANCIAL GROUP MIZUHO FINANCIAL GROUP

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