UOB chief banks on Asean focus amid trade war

UOB PLaza in Raffles Place. For its expansion in the region, the bank is planning to use digital technology and artificial intelligence, rather than acquisitions, says its chief executive officer Wee Ee Cheong.
UOB PLaza in Raffles Place. For its expansion in the region, the bank is planning to use digital technology and artificial intelligence, rather than acquisitions, says its chief executive officer Wee Ee Cheong.ST FILE PHOTOS
UOB PLaza in Raffles Place. For its expansion in the region, the bank is planning to use digital technology and artificial intelligence, rather than acquisitions, says its chief executive officer Wee Ee Cheong.
UOB PLaza in Raffles Place. For its expansion in the region, the bank is planning to use digital technology and artificial intelligence, rather than acquisitions, says its chief executive officer Wee Ee Cheong (above).ST FILE PHOTOS

Bank takes distinct path from larger Singapore rivals

United Overseas Bank (UOB) is betting South-east Asia will shield it from the escalating trade war between the United States and China, distancing itself from the approach of its two main rivals that have expanded their focus to Hong Kong and the mainland.

"Asean will become a safe haven," chief executive officer Wee Ee Cheong said in an interview at UOB headquarters in Singapore, referring to the Association of South-east Asian Nations. His bank is taking a distinct path from its larger Singaporean rivals, which took over lenders in Hong Kong as a gateway to mainland China, the engine of Asia's growth in the past two decades. Now the tides are turning as the US-China trade war enters a new phase with rising tariffs that will hit Asia's biggest economy.

"Hong Kong is a city. It is just part of China," said Mr Wee, 66. Most of the banking industry in the city is controlled by HSBC Holdings, Standard Chartered and Chinese banks, he said. "No matter how big you buy, you are just a marginal player."

Oversea-China Banking Corp, South-east Asia's second-largest lender, spent about US$5 billion buying Wing Hang Bank in Hong Kong in 2014 after DBS Group Holdings bought Dao Heng Bank in 2001. Both firms are expanding in China's Greater Bay Area strategy that connects Hong Kong to major coastal cities on the mainland to form a new technology and economic hub.

UOB is not shunning China entirely. While the bank wants to sell its 13 per cent stake in Hengfeng Bank on the mainland which it bought in 2008, it plans to deploy capital by raising the number of its branches there. "I would rather grow myself," Mr Wee said. The bank also has wholesale banking operations in Hong Kong and the mainland that capture investment and business flows between Greater China and South-east Asia.

Mr Wee's focus on South-east Asia carries on a presence built in the region mostly by his billionaire father Wee Cho Yaw, who ran the bank from 1960 to 2007. His grandfather Wee Kheng Chiang established the family's first bank in Malaysia's Sarawak in 1924 before founding Singapore's UOB in 1935.

With 10 nations and 650 million people, Asean boasts a combined economy bigger than India's and is forecast to be the world's fourth largest by 2030. It will have three of the seven fastest-growing economies over the next decade, based on Standard Chartered's projections. Mr Wee highlighted Japanese automakers' investment in South-east Asia as an example of the region's attractiveness.

For its expansion in the region, UOB is planning to use digital technology and artificial intelligence, rather than acquisitions, he said. It is rolling out its TMRW digital bank in Thailand and will introduce it in Vietnam, Indonesia and possibly Malaysia. It will add branches selectively in emerging markets.

Mr Wee also highlighted differences with UOB's rivals in its approach to expanding the wealth management business. The bank will rely on its strength in commercial banking to cross-sell products to business owners, rather than buy assets from other banks. DBS and OCBC have grown their wealth businesses partly through acquisitions.

"It's not a question of conservative," Mr Wee said, referring to the wealth strategy. "We're low-key. We're practical."

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A version of this article appeared in the print edition of The Straits Times on May 31, 2019, with the headline 'UOB chief banks on Asean focus amid trade war'. Print Edition | Subscribe