UOB to double wealth income by 2030 by better tapping growing pool of rich customers: CEO

SINGAPORE - UOB aims to double its wealth income by 2030 by better serving a growing pool of affluent customers, deputy chairman and chief executive Wee Ee Cheong said during an earnings briefing on May 7.

“We see significant opportunities, including with wealth, underpinned by a large and increasingly affluent customer base that is underpenetrated. This gives us a long runway for sustainable, organic growth,” he said.

The bank’s immediate focus is on growing assets under management (AUM) and increasing penetration of invested AUM, said Mr Wee, who declined to share targets around AUM.

This includes strengthening wealth advisory through more personalised solutions, continuing to invest in talent, including those in private banking, and advancing digital and cross-border wealth capabilities, particularly in ASEAN and North Asia, he noted.

Beyond retail, a strong regional franchise allows the bank to play a meaningful role in supporting foreign direct investment (FDI) and cross-border growth, said Mr Wee.

One example is the Johor-Singapore Special Economic Zone, he said, adding that UOB’s green lane arrangement with Invest Johor has facilitated more than $5.8 billion in FDI in the zone.

UOB group is also reshaping towards a “capital-lite, higher ROE growth” strategy – supported by a more disciplined approach to balance sheet management.

His comments come as the bank on May 7 posted a fall in first-quarter net profit on the back of what it called a softer operating environment.

Following the announcement, UOB shares were 0.33 per cent lower at $36.53 at midday break. DBS inched 0.2 per cent higher to $58.97 while OCBC gained 0.14 per cent to $22.03.

Mr Wee said in a statement that the group delivered a steady performance in the first quarter.

“While global uncertainty remains elevated, business activity held up across our key segments, with ongoing momentum in CASA (Current Account Savings Account), wealth, cards and loans.”

He said the bank will leverage its regional footprint and deep ASEAN connectivity to stand ready to support customers as they navigate a more uncertain operating environment.

For its 2026 outlook, UOB kept its guidance unchanged, including low single-digit loan growth, high single-digit fee income growth, low single-digit operating cost growth and total credit costs at 25 to 30 basis points.

Mr Wee also maintained a full-year net interest margin of 1.75 per cent to 1.8 per cent and low single-digit loan growth.

Net profit for the three months to March 31 was $1.44 billion, down 4 per cent from $1.49 billion a year ago, but beating analysts’ expectations of $1.39 billion in a Bloomberg poll.

Net interest income fell 4 per cent to $2.32 billion on lower benchmark rates, with net interest margin narrowing to 1.82 per cent from 2 per cent a year ago.

Net fee income slid 8 per cent to $637 million, while other non-interest income plunged 17 per cent to $462 million, mainly due to softer trading and investment income.

But the bank lowered its allowance for credit and other losses by 30 per cent to $203 million, mainly due to lower general allowance.

The group’s non-performing loan ratio was 1.5 per cent, down from 1.6 per cent a year ago. Coverage levels continued to be sound and adequate, UOB said.

UOB chief financial officer Leong Yung Chee said at the briefing that the bank’s direct exposure to the Middle East region is “limited”.

But UOB is currently assessing second-order impact across energy-vulnerable industries such as transportation, utilities and agriculture, he said. “We’re looking at assessing how much of these industries have clients who may be affected as a result.”

However, it is more difficult to assess third-order impact as it is unclear how prolonged the conflict will be, he noted.

“There is potential impact on Asia’s economic growth environment, inflationary pressures and so on – so that actually requires much further stress scenarios,” he said.

He also noted that the bank expects uncertainties to prevail, but is confident that a strong capital base and adequate provision buffers will help it manage through the uncertainties.

The bank expects one US Federal Reserve interest rate cut in 2026, though Mr Leong noted that US rates and Sora (Singapore Overnight Rate Average) – to which the bank is more sensitive – have significantly decoupled.

He is not expecting a drastic drop in Sora in 2026, given that its rates declined sharply over 2025.

“As far as Sora is concerned, we expect limited downside. I think it has already moved significantly over the course of last year,” he said.

“If you look at our net interest margin in the last two quarters, it’s been bouncing around and looking quite stabilised. So even if there is downside, it is fairly limited.”

Net interest margin – a key profitability metric for banks – is the difference between interest earned on assets such as loans and securities and interest paid out to depositors.

UOB is the second of Singapore’s three local banks to report first-quarter earnings, with DBS kicking off the season on April 30. OCBC will announce its earnings on May 8.