SINGAPORE — Small-and-medium enterprises (SMEs) are currently underserved by financial institutions and can become a key engine of growth for CIMB Bank in Singapore, said its chief executive Victor Lee.
To tap the potential of the segment, the Singapore branch of the Malaysian financial services provider is stepping up various initiatives to help SMEs.
“In Singapore, with the emergence of all these P2P players, that is proof enough that there is a segment (of SMEs) out there that is not being served (by banks),” said the 49-year-old Singaporean in a recent interview with Yahoo Finance Singapore.
Lee was referring to the strong growth of peer-to-peer (P2P) lending services. Online services providing P2P lending help individuals and companies by matching their lending and borrowing requirements without the need for financial institutions. According to the Cambridge Centre for Alternative Finance, P2P lending in Asia rose from US$108 billion in 2014 to US$330 billion in 2018.
Many SMEs prefer to use P2P lending to finance their growth due to ease of access and what they perceive to be lower lending costs. But Lee said that P2P lending could still entail higher costs compared with bank financing.
Helping SMEs through pandemic
The SME segment is key to growing CIMB’s corporate banking business. Corporate banking makes up two-thirds of its business in Singapore, with the remainder split between consumer and commercial banking, and the segment is poised for accelerated growth especially in the digital space, Lee said.
“I’m bullish about CIMB in Singapore. Our last 10 years set in place the business lines that formed the foundation of our existence. Our next 10 years will be focused on acceleration,” he added.
In the meantime, the COVID-19 pandemic has magnified the need to help SMEs and other companies tide through the crisis, with these businesses needing at least six months of short-term financing assistance, according to Lee. Towards this end, CIMB has put in place measures to help businesses.
For instance, the bank has expanded its e-Supply Chain Financing programme with a limit of up to S$100 million to help suppliers via the platform of its e-procurement service provider partner.
The bank has also introduced the CIMB C-19, a temporary bridging loan scheme, the CIMB BizAssist, which provides working capital loans, and the CIMB Biz Relief Scheme to allow the deferment of payments for secured and non-secured loans until end-December.
On the emergence of digital banking, Lee said that CIMB did consider whether to apply for such a licence after the Monetary Authority of Singapore announced that it would start taking in applications in August last year.
“We didn’t see the need to because we are already a bank. Today, we already acquire our customers digitally. In essence, we are already a digital bank,” Lee said.
While the competition will intensify with the introduction of digital banks, Lee stressed that CIMB executives “spend half their time” discussing and implementing strategies in the space. “We are not afraid of the competition. In fact I think we are ahead of the curve.”
Discovering his calling
A banking veteran with more than 20 years of experience in the retail and commercial banking sectors, Lee has worked in markets including Singapore, Malaysia and Taiwan.
His career reached another milestone in January when he was appointed the CEO of CIMB’s Singapore branch, succeeding Mak Lye Mun, who retired after being at the helm for 10 years. Lee is also the CEO of CIMB Group’s commercial banking, and spends two days a week at the parent company’s headquarters in Kuala Lumpur.
Lee’s parents had wished for him to become a doctor but he did not find the profession to be his calling. He pursued a degree in engineering at the Nanyang Technological University but dropped out of his honours year programme. As fate would have it, he did not become an engineer as well.
At a job fair, he secured two job offers and joined DBS Bank in 1994 as he admitted that it “promised S$50 more in monthly salary compared to the other offer on the table”. It was to become a springboard for his illustrious banking career. In 2008, Lee was voted one of the Top 40 Asia Pacific Banking Leaders under 40 to look out for by The Asian Banker.
On his choice of profession, Lee said, “I thought then that it was a dignified and prestigious job, alongside lawyers, accountants and doctors, which our parents continue to hold in high regard.”
Banks were giving good training for newcomers to become bankers when Lee started his career. This gave him greater confidence later on that banking was the right choice for him.
“I couldn’t have been so clear about my future and ambitions. Hence, I took the traineeship program at DBS.”
Fast forward to 2020, when CIMB marks the 11th anniversary of its business in Singapore. The bank now employs around 1,300 people and has two branches locally.
At the core of his goal to transform CIMB to become one of the top banks in Singapore are his staff, with whom he enjoys interacting with.
“People are at the top of my agenda. When we have the right team with the right mind-set, the team becomes invincible.”