UOB injects $425 million into China subsidiary
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This follows the acquisition announcement of Citigroup's consumer banking franchise in Indonesia, Malaysia, Thailand and Vietnam.
PHOTO: REUTERS
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SINGAPORE - UOB is beefing up its China subsidiary so it can provide more regional services and sustainability-related solutions.
The move follows the announcement on Jan 14 that the bank is acquiring Citigroup's consumer banking franchise in Indonesia, Malaysia, Thailand and Vietnam for about $4.915 billion.
Its new China initiative involves injecting two billion yuan (S$424.8 million) in UOB China for developing cross-border financial solutions and hedging services to help clients manage foreign risk exposures.
Mr Wee Ee Cheong, UOB's deputy chairman and chief executive and UOB China chairman, said on Tuesday (Jan 25) that the investment signifies "firm confidence in (China's) growing economy".
He added that UOB China is gearing up for more financial services demand as cross-border trade and investments increase between China and Asean on the back of the newly enforced Regional Comprehensive Economic Partnership.
Mr Wee said that "with enhanced intra-regional connectivity, coupled with increased cross-border trade and investments, we are investing in our capabilities to support closer connectivity between China and Asean".
Asean was China's top trade partner in 2021, with bilateral trade amounting to 5.67 trillion yuan, an increase of 19.7 per cent year on year, according to the China General Administration of Customs.
UOB China has maintained a compound annual revenue growth of 13 per cent since it was incorporated in 2008, UOB said. Net profit before tax hit a record high last year and more than doubled from 2018.
Mr Wee added that UOB's acquisition of Citigroup's consumer banking franchise in Malaysia, Thailand, Indonesia and Vietnam will accelerate its growth targets by five years and immediately add $1 billion to its annual income.
It will also double the number of the bank's retail customers in four of Asean's largest markets to 5.3 million, and make it among the top three card issuers in Thailand and Malaysia and among the top five in Indonesia.
The acquisition of Citi's consumer business comes after UOB said last September that it will invest up to $500 million over the next five years to scale up its digital offerings in Singapore and the rest of Asean.
UOB shares closed up 1 per cent at $30.02 on Wednesday.
