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History Of Banking In Singapore: How We Ended Up With The 3 “Big” Banks For Consumers

Biggest banks in Southeast Asia too.

Singapore banks - DBS, OCBC, UOB

While Singapore is a major financial hub, the Ministry of Finance (MAS) lists 6 local banks in Singapore today. In addition to the three big local banks, DBS Bank, OCBC, and UOB, there is also Bank of Singapore (a fully-owned subsidiary of OCBC), as well as the digital banks: GXS Bank and MariBank Singapore.

As we can see below, these banks may hold various types of licences. In general, the three big banks still hold comprehensive licences, while the digital banks hold a limited set of banking licences (for now?).

Banks Licence Type/Status
Bank of Singapore
(fully-owned subsidiary of OCBC)
– Local Bank
– Exempt Capital Markets Services Entity
– Exempt Financial Adviser
– Exempt Trust Company
DBS Bank – Local Bank
– Designated payment System Settlement Institution
– SGS Primary Dealer
– Exempt Capital Markets Services Entity
– Exempt Financial Adviser
– Exempt trust Company
– Exempt Benchmark Submitter
GXS Bank – Local Bank
MariBank Singapore – Local Bank
– Exempt Capital Markets Services Entity
Oversea-Chinese Banking Corporation (OCBC) Bank – Local Bank
– SGS Primary Dealer
– Exempt Capital Markets Services Entity
– Exempt Financial Adviser
– Exempt Benchmark Submitter
United Overseas Bank (UOB) – Local Bank
– SGS Primary Dealer
– Exempt Capital Markets Services Entity
– Exempt Financial Adviser
– Exempt trust Company
– Exempt Benchmark Submitter

If we like, we can also browse the MAS website to look at the lists of banks in Singapore that are a Qualifying Full Bank, Full Bank or hold other types of licences.

They will include the major foreign banks such as BNP Paribas, China Construction Bank (CCB), Citibank, HSBC Bank, Maybank, Standard Chartered Bank, State Bank of India and more.

Read Also: GXS Bank Vs Trust Bank Vs MariBank: Which Digital Bank Should You Choose?

Earliest Banks In Singapore – In The 1800s

Foreign banks were the main players in Singapore’s financial landscape in the 1800s. In 1840, the Union Bank of Calcutta became the first bank to establish a presence in Singapore. Today, it forms part of the State Bank of India (SBI).

In fact, the first banknote with the words “Singapore” printed on them were issued by the Union Bank of Calcutta. These banknotes became the main paper currencies used in Singapore for several decades after. It wasn’t until 1899 that Singapore got the Straits Settlements dollar – which was legal tender in the Malay States and in the territories that came under British influence in Borneo.

Other foreign banks quickly established a presence in Singapore. These include HSBC which can trace its roots to Singapore back to 1856 via the Mercantile Bank of India – which it acquired in 1959. HSBC itself opened its first Singapore office in 1877. Standard Chartered also has a long history in Singapore, dating back to 1859. Back then, it was known as the Chartered Bank of India, Australia and China.

Citibank was the first American bank to open in Singapore. In 1902, known as the International Banking Corporation (IBC), it established a Singapore branch. ABN Amro, via a historical banking ancestor, is also tied to Singapore – establishing a presence in the late 1800s.

Commonly attributed as the first locally-founded bank in Singapore, the Kwong Yik Bank was founded by Wong Ah Fook, a Cantonese businessman, in 1903. Unfortunately, following a bank run with high withdrawal rates, the bank went into liquidation.

Following this, many other local Chinese businessmen began founding their own banks. Typically, these followed dialect lines in the early days. Some of the earliest local banks include Sze Hai Tong Banking & Insurance Company Limitedfounded in 1907 and is part of OCBC today – and Lee Wah Bankfounded in 1920 and is part of  UOB today.

History Of The 3 Major Local Banks

#1 DBS Bank

DBS Bank was established in 1968, as part of the Economic Development Board (EDB) to finance fledgling industries and grow new ones. Its initials were once an abbreviation for the Development Bank of Singapore.

In 1972, DBS opened its first bank branch in Jurong – the largest industrial estate and a fast-developing residential estate.

In 1998, DBS acquired POSB for $1.6 billion as part of the government’s call for a consolidation of local banks to effectively compete internationally.

POSB itself is an acronym for Post Office Savings Bank. POSB has a far more storied history – set up by the British Government in 1877 to provide banking facilities for lower-income groups. It was the first of similar savings banks in the British Straits Settlements in Singapore, Penang and Malacca.

In 1949, Singapore’s POSB was separated from other post office savings banks in Malaya. Following Singapore’s separation from Malaysia in 1965, control of the POSB was transferred to the Postmaster-General of Singapore in 1966.

In 1971, POSB ceased to be a branch of the postal services department. In 1972, POSB was turned into a statutory board by the Singapore Government. In 1990, it changed its name to POSBank, and was finally acquired by DBS eight years later.

Today, the combined entity – both DBS and POSB – has more than 150 branches across Singapore. It is one of Asia’s leading banks with 12 million customers in 19 markets, in Southeast Asia, Greater China and South Asia.

Currently, DBS has a market capitalisation of $84 billion.

#2 OCBC Bank

During the Great Depression, OCBC Bank was born from the merger of three Hokkien banks – the Chinese Commercial Bank (established in 1912), Ho Hong Bank (established in 1917) and Oversea-Chinese Bank (established in 1919).

During World War II, OCBC Bank’s head office was transferred to Bombay, India – before re-registering in Singapore after the war. Later it became the first Singapore bank to open branches in China.

In 1972, OCBC Bank acquired the Four Seas Communication Bank – which started out as the Sze Hai Tong Banking & Insurance Company – founded in 1907. The bank had changed its name to Sze Hai Tong Bank in 1957, and then again to the Four Seas Communication Bank in 1964.

While the Four Seas Communication Bank continued to enjoy autonomy in its daily operations, it finally came under the OCBC Bank umbrella in 1998. The consolidation of banks during this period was part of MAS’ requirements for a higher minimum capital funds of $1.5 billion.

OCBC Bank was involved in further consolidations, as it acquired Keppel TatLee Bank, along with Keppel Securities and Keppel TatLee Finance. Keppel TatLee Bank itself was the merged entity of Keppel Bank and Tat Lee Bank in 1998.

OCBC also acquired the Bank of Singapore, formerly known as ING Asia Private Bank in 2010 for over $2 billion. It further buttressed its private banking business with the acquisition of Barclay’s wealth and investment management business in 2016.

Other well-known OCBC Bank subsidiaries include OCBC Securities, Great Eastern, Lion Global Investors, as well as the Bank of Singapore.

Today OCBC has close to 35 bank branches in Singapore. It is the second-largest bank in Southeast Asia, and has an established banking presence in Malaysia, Indonesia, Vietnam, Thailand, Mainland China, Hong Kong, Macau and Taiwan.

Currently, OCBC Bank’s market capitalisation is more than $58 billion.

#3 UOB

Mainly catering to the Hokkien community in Singapore, UOB was originally founded as United Chinese Bank (UCB) in 1935. It was renamed United Overseas Bank, or UOB, in 1965 to avoid duplication with a similarly named bank in Greater China.

Helmed by the Wee family since its founding by Sarawak-born Wee Kheng Chiang, UOB has undergone various acquisitions over the decades.

In the 1970s, it acquired Chung Khiaw Bank – set up by Tiger Balm founder Aw Boon Haw in 1950. Later, it added Lee Wah Bank, founded by Eu Tong Sen in 1920. In the 1980s, UOB acquired Far Eastern Bank and Industrial and Commercial Bank.

In 2001, UOB scored a major coup by acquiring Overseas Union Bank (OUB), then the fourth largest bank in Singapore, in a $10 billion cash-and-shares deal. UOB edged out DBS’ hostile acquisition bid to secure this acquisition.

Today, UOB has over 40 bank branches in Singapore – with most of its operations in Southeast Asia and a globalised presence in Asia Pacific, North America and Western Europe.

Currently, UOB is the third largest bank in Southeast Asia, and has a market capitalisation of $47 billion.

Read Also: DBS (D05); UOB (U11); OCBC (O39): Singapore Banks Dividend Yield And Share Price Performance

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