Trump's new tariffs on China could reduce the global economy, said OCBC's CEO

President Donald Trump's new tariffs on China could "reduce" the global economy, said Friday the managing director of the second largest lender in Singapore, Oversea-Chinese Banking Corp.

"This is not good for the Asian economy nor for China, but it is not good either for the US. In the end, we are not able to Use the efficiencies that each of the economies can offer and then grow globally, "Samuel Tsien, chief executive officer of OCBC, told Martin Soong of CNBC.

"So, the end result is that it risks harming the economy if we are not able to take advantage of the efficiency of each of the different markets," Tsien said.

On Thursday, Trump announced that the United States would impose 10% additional tariffs on Chinese goods worth $ 300 billion in the United States.

Rates will be effective September 1 st . This is part of ongoing trade negotiations between the two countries, which resumed in Shanghai this week after months of deadlock talks.

Economists have predicted that the trade fight would win in several countries as companies adjust their supply chains and transfer their manufacturing activities to economies that are not affected by tariffs.

However, Tsien said the move of the distribution out of China would be less important than it is believed. This is largely due to the fact that the transfer of production out of China also involves an evolution of hardware and software.

"Companies already well established in the countries of Southeast Asia – such as Thailand, Vietnam and Malaysia – have increased their capacity … as for new companies that migrate, we hear a lot talk, "said Tsien. during the OCBC results briefing. "People would like to do it, but there is not much real investment yet that has been done."

The Singaporean lender OCBC announced Friday that the second quarter net profit had increased 1% over last year. Net income was S $ 1.22 billion ($ 886 million), mainly due to higher fee income, including higher Wealth Management fees.

Net interest margin, a key indicator of bank profitability, rose 12 basis points to 1.79%. This was attributed to higher badet returns in Singapore, Hong Kong and China.

For the first half of 2019, OCBC announced an interim dividend of 25 cents per share, 5 cents higher than last year.

United Overseas Bank, a Singaporean lender, also announced its profits on Friday. Net income in the second quarter of 2019 was S $ 1.17 billion, up 8% from the previous year.

Monday, DBS Group, the largest lender in Southeast Asia, announced a 17% increase in profits in the second quarter to reach $ 1.60 billion Singapore.

The three lenders weigh heavily in the Straits Times benchmark, which closed down 0.94% on Friday. The stocks of the three banks declined on the same day.