SINGAPORE - Headwinds will persist for United Overseas Bank (UOB) this year, but the bank will have no issue weathering the volatility ahead, the bank said Thursday.
Meanwhile, UOB will be cautious with its approach to grow businesses, without blindly acquiring assets for the sake of building size.
Chief executive Wee Ee Cheong highlighted a steady future at UOB's annual general meeting (AGM) at Pan Pacific Singapore. Addressing more than 500 shareholders at the AGM, Mr Wee stressed that the bank is facing a slowdown, not a crisis.
A choppy business environment and financial market last year was reflected in the 1.2 per cent net profit drop to S$3.2 billion in 2015.
Concerns of weak asset quality have also come to the fore as plunging energy prices led to rising bad debt among companies in the oil and gas sector.
UOB is "comfortable" with its exposure to the oil and gas sector, with stress test showing no need to raise credit cost, Mr Wee said.
All resolutions were passed in a largely quiet session, but one shareholder asked how UOB plans to grow its business, amid bold moves by competitors to pursue growth through acquisitions.
OCBC captured the market's attention earlier this month with its move to buy Barclays' wealth and investment management business for S$431 million.
In response, Mr Wee Cho Yaw, UOB's chairman emeritus, said the management wants to be very careful with the risks of acquisitions in this uncertain environment.
CEO Mr Wee added that "size is not everything", and while UOB will keep its eyes on opprtunities to expand, its first priority is to pace its growth and maintain a strong balance sheet.