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ublicly listed Bank OCBC NISP, the local branch of Singapore-based OCBC bank, is expanding its business to include trusteeship, serving its individual and corporate clients in managing repatriated assets, to boost its fee-based income.

OCBC NISP national funding business head Eny Surjani Tanudiredja said on Monday that the lender had secured a license from Financial Service Authority (OJK) in August to provide the trusteeship service.

It allows the bank to act as a payment and investment agent, assisting its clients — called settlors — in disbursing money to their suppliers and providing integrated service for investment instruments for individuals.

“Everything will be done based on the contracts approved by the settlors. We are not allowed to give advice or act as consultants,” Eny said during a press briefing in Jakarta, adding that the lender did not yet have any specific sectors for which to focus on settlors.

Trusteeship is a specific banking service provided by certain internationally acknowledged banks. Indonesia currently only has three banks, all state-owned, namely Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and Bank Mandiri, that provide this service.

As a private lender of which 85 percent of its shares are owned by OCBC Overseas Investments Pte. Ltd., OCBC NISP will be the fourth bank in Indonesia and the first private lender in the country to provide trusteeship service.

The banks will obtain annual payment from settlors after disbursing payments every month. Funds managed under trusteeship service were excluded from the bank’s balance sheet, as to have no potential risk to the client’s funds, even if the bank was liquidated, Eny explained.

For starters, the lender aims to secure 20 corporate settlors and 10 individual settlors next year. Funds disbursed from each company range from Rp 10 billion (US$472,000) to Rp 50 billion per month.

As for individuals, OJK allows them to enjoy trusteeship service with a minimum deposit of Rp 5 billion.

OJK has allowed banks to provide trusteeship to individuals since July to assist wealthy Indonesians
who joined the tax amnesty by repatriating their offshore assets. The funds could be directed into several investment instruments, including sovereign bonds and mutual funds.

In September, OCBC NISP was appointed as one of the tax amnesty gateway banks to receive declared and repatriated assets from the tax amnesty.

OCBC NISP president director Parwati Surjaudaja said the bank had recorded repatriated assets worth of Rp 3.5 trillion and declared assets of Rp 2 trillion. She hopes these funds will be invested in Indonesia through trusteeship service.

“Besides, our bank has a strong network not only in Indonesia but also in 18 countries through OCBC network,” she said.

In its debut, OCBC NISP would focus on knowing its customers’ behavior in order to succeed in its trusteeship service, Parwati said.

During the first nine months of the year, OCBC NISP booked Rp 1.1 trillion in non-interest income, a 104 percent surge from Rp 538 billion in the same period last year.

However, the lender saw a 1 percent decrease in assets to Rp 129.5 trillion by September from Rp 130.6 trillion in the same period last year. (wnd)