United Overseas Bank's (UOB) cash management business has grown at a record pace to an all-time high in the first half of this year. The bank expects more rapid growth as companies seek financial solutions amid volatile economic conditions.
In the first six months, UOB's cash management revenue shot up 42 per cent over the same period a year earlier, its fastest six-month pace on record - to an all-time high.
The uncertain economic outlook and slowing growth both at home and in key markets around the region will further drive the business, said Ms So Lay Hua, the bank's group head of transaction banking.
"Because of the volatile market conditions, customers are reviewing their banking relationships and looking at which banks are here to stay - those are the ones they want to engage," she told The Straits Times in an interview. "There are also only a handful of banks, like us, with very strong credit ratings."
In the aftermath of the 2008 financial crisis, several United States-based and European banks suffered big losses and had their credit ratings slashed. Many exited the Asian market or sharply scaled down their presence in the region.
Customers know that UOB is rooted in Singapore and Asia, and that it has a large network across emerging markets in the region, with over 500 branches and offices in Asia - both attractive factors to corporates today, Ms So said.
It helps too that UOB has been investing heavily in its cash management business over the past 1 1/2 years. It has expanded its team of cash management specialists across the region by more than 10 per cent this year and now has a 300-strong team of bankers specialising in cash management and trade finance across its network.
The bank has also invested in a new Internet banking service that gives clients a regional view of their liquidity and working capital positions any time of the day.
Increasingly, companies want such "round-the-clock" services, Ms So said. This means that a company with operations in both Singapore and, say, the United States, can have access to its accounts and tap UOB's services regardless of what time it is in either location.
Clients are also increasingly keen on services that can, at one glance, give them an overall view of all their cash balances, although they may be in different currencies across various markets.
And so UOB offers them solutions through which the balances are consolidated, enabling them to deploy their funds more effectively according to their business needs. This helps firms reduce the cost of running their business.
"This is the reason why we have been gaining traction - we have put in the right resources, expanded the team and we now speak the language of the global client," Ms So said. "And now, the current market conditions have actually sped up the opportunity for us to be seen as on par with global banks."