Oversea-Chinese Banking Corporation (OCBC) O39 says it has extended more than $3.5 billion via its OCBC Eco-Care Loans, accounting for one in five home, renovation and car loans by the bank since the scheme’s launch in March 2021.
Traction in 2022 was “particularly strong”, says OCBC in a March 27 press release, with the total value of OCBC Eco-Care Loans extended quadrupling y-o-y from 2021.
In particular, home loans drove the overall Eco-Care Loans’ y-o-y growth, increasing four times in value compared to the previous year. OCBC’s sustainable home loans also accounted for close to a quarter of the number of new home loans extended by OCBC in 2022.
To verify whether a customer’s home or renovation will be energy-efficient, they must first complete an online Tropical Home Energy Efficiency Assessment, developed by the Building and Construction Authority.
Under the bank’s promotional three-month compounded Singapore Overnight Rate Average (Sora) pricing package, home loan customers pay the Sora rate with an additional 0.75% in the first and second years of the loan tenure. This increases to 0.80% in the third year and 1% thereafter.
Meanwhile, nearly two-thirds of the scheme’s renovation customers reside in an HDB. The renovation loan lets customers borrow up to six times their monthly income, or $30,000, whichever lower.
See also: OCBC joins Net-Zero Banking Alliance, aims to unveil sectoral decarbonisation targets by 1H2023
In addition, homeowners who qualify for the Eco-Care Home or Renovation Loans can enjoy a one-time $88 bill rebate when they apply for Senoko’s LifeGreen24 plan this year.
Finally, the value of Eco-Care Car loans extended in 2022 surged by more than 400% from 2021, says OCBC.
According to the bank, the scheme’s electric vehicle (EV) car loans offer preferential rates, at 2.48% per annum (p.a.). This is lower than the rate of 2.78% p.a. for petrol and diesel car loans by OCBC. With a loan for an EV, for example, customers pay an effective interest rate (EIR) of 4.65% p.a. based on a loan tenure of seven years
Customers are also given three months of free charging credits at the more than 700 Charge+ charging points across Singapore. Charge+, also known as the green mobility business of Sunseap Group, plans to install 10,000 EV charging points island wide by 2030.
OCBC has pledged to grow its sustainable finance portfolio to $50 billion by 2025, though the consumer-facing Eco-Care Loans do not contribute to this figure. This goal could be revised soon, as OCBC says it has already committed $44 billion at the end of 2022.
In October 2022, OCBC joined the Net-Zero Banking Alliance (NZBA) — an industry-led initiative convened by the United Nations. Under the NZBA’s guidelines, the bank will announce its sectoral financed emission targets by 1H2023.
Sunny Quek, head of global consumer financial services at OCBC, says the bank is targeting 10% y-o-y growth in its OCBC Eco-Care Loans this year, in the face of inflationary pressures and expectations that the housing market may slow.
“By addressing the top two concerns of Singaporeans — cost and convenience — the take-up rate for OCBC Eco-Care Loans has been better than expected and this upward trajectory should continue,” says Quek.
Sustainability is an important growth pillar in OCBC’s corporate strategy, adds Quek. “OCBC Eco-Care Loans is just one way that we are seizing green opportunities — while simultaneously doing our part for the environment. Our customers can expect more sustainability-themed products and services from us in the coming year as we seek to entrench ourselves as a leader in this space.”
As at 3.55pm, shares in OCBC are trading 3 cents higher, or 0.24% up, at $12.39.
