Wee Yi Cheong, Deputy Chairman and CEO of United Overseas Bank, shares his views on ASEAN’s financial future.
Global Finance: What impacted UOB’s results in 2023?
Wee Yi Chong: The ASEAN region is growing and has great potential. We believe this is a region where we can compete and succeed.
Our goal is to become the bank of choice for ambitious people in ASEAN. The growing prosperity of the region provides UOB with a huge opportunity for expansion. By acquiring Citigroup’s consumer banking businesses in four ASEAN markets—Indonesia, Malaysia, Thailand and Vietnam—we now provide scale and profitability in these markets.
We also aim to become the leading cross-border trade bank in ASEAN. We have one of the largest footprints among leading regional banks. The combination of our deep industry experience and local market knowledge allows us to help businesses navigate market complexities and seize growth opportunities. Through our connections, we seamlessly support businesses by facilitating intra- and inter-regional trade, payments and foreign exchange flows, as well as cross-border investment.
Over the past eight years, we have invested US$800 million in building our regional money, trading and payments platforms and the results are starting to show. We will see a more complete effect in the coming years. As a long-term player, we continue to invest in our regional franchise for sustainable growth.
GF: How has the integration of Citi assets progressed? Is it full?
Chong: In 2023, we grew our retail customer base across the region to eight million by completing the acquisition of four ASEAN consumer banking businesses from Citi. We have successfully integrated new businesses in Malaysia and Indonesia with UOB platforms, while integration in Thailand is planned for the first half of 2024, with Vietnam following suit in 2025.
This transformational transaction doubles our retail customer base in these four countries and accelerates UOB’s growth in the region by five years. We are now focused on leveraging synergies to cross-sell to our expanded customer base.
With stronger capabilities and expanded scale, we are also well positioned to develop strategic partnerships across multiple markets. Last year we announced mega lifestyle offers as sponsors of Taylor Swift’s The Eras Tour in Singapore and Ed Sheeran’s +–=÷x Tour in four of our key markets. We will do more to expand lifestyle offerings that meet the needs and aspirations of our customers.
GF: What sustainable development indicators has the bank achieved in 2023?
Chong: Sustainability is a strategic area where we focus our efforts to make an impact as part of our promise to do right by our stakeholders. This is fundamental to UOB’s corporate objectives and we want to be a responsible financial steward helping individuals, companies and communities build the future of ASEAN.
In 2023, UOB published its first year net zero report, outlining its commitment to reach net zero emissions by 2050. We have made positive progress towards achieving the targets set for our five core sectors: energy, automotive, real estate, construction and steel. In 2022, we achieved reductions in emissions intensity across all five sectors. Our commitment also includes no new financing for oil and gas projects approved for development after 2022. Together, these six sectors represent approximately 60% of our corporate loan portfolio.
GF: Are there any new challenges that UOB or the wider banking sector will face in 2024 that were not present in 2023?
Chong: The same macroeconomic uncertainty will continue this year, with longer-term interest rate hikes, geopolitical instability and weaker global demand weighing on credit growth.
Looking to the near-term, we believe the banking industry is likely to see regionalization of economic flows, the emergence of new industries driven by a commitment to sustainability, artificial intelligence taking service and productivity to new levels, and the rise of regulated digital currencies and tokens.
UOB is transforming itself to meet the challenges presented by these trends. We are reshaping our business to promote ASEAN connectivity and cross-border trade. We also leverage our expanded capabilities, expanded customer base and synergies from the Citi acquisition to meet customers’ needs and lifestyle aspirations.
In addition, we are developing new initiatives focusing on new areas such as sustainability and innovation. We are also redoubling our efforts to improve productivity by digitizing our processes, improving the customer experience, deepening employee engagement and optimizing costs. Together, these initiatives will help ensure UOB’s sustainable growth while remaining true to our commitment to balancing growth and stability. The external environment may change quickly, but we are here for the long term and remain steadfast in our promise to do right by our customers. This has always been our North Star.