Resilient UOB relishes regional role

In Thailand’s highly competitive banking industry, UOB has proven its resilience as a foreign bank over the past 25 years thanks to a strong Southeast Asian network, brand strength and its ability to win the trust of Thai customers.
The bank’s acquisition of Citigroup’s consumer banking businesses across four markets in Southeast Asia, including Thailand, which was completed in November 2022, was a “game changer”, enabling the Singaporean bank to significantly increase its cardholder base to 2-4 million, up from 1.2 million, while becoming the No. 3 credit card issuer in Thailand, said UOB Group’s deputy chairman and chief executive Wee Ee Cheong during a visit to Bangkok. UOB now has a total of about 8 million cardholders in Southeast Asia.
“The first 10-15 years were challenging, but I think after our acquisition of Citibank [assets] and becoming the third-largest credit card issuer, that gave us a totally different perspective in the region,” said Mr Wee.
UOB is one of the major Singaporean banks and the only one that is locally incorporated in Thailand. “Thailand is an important market for us, partly because it’s a big country and there is room to grow our presence. We are very much committed to this market,” he said.
In Thailand, 70% of UOB’s business is consumer-related, especially after it took over Citibank’s assets because that bank’s focus was consumer-based, said Mr Wee.
UOB turns 90 next year and is the third-largest banking group in Southeast Asia by assets. The lender operates in 19 countries.
“How many foreign banks stay in Thailand for 25 years and continue to do well? For us, 25 years here reinforces our belief that in any country we enter, we must take a long-term view. You must believe. If you don’t believe, then it is difficult to start. If you believe, you can attract good customers,” he said.
“Banking is about trust and confidence. Would you bank with a bank that is here today but gone tomorrow? If you want to build a factory, you’ll have a loan for 10 years. But what if, three years later, the bank says ‘I’m going to get out [of Thailand] now’?”
When asked about whether UOB was planning on further mergers and acquisitions (M&As), Mr Wee said the company is always on the lookout. “But, given the base we have today, I think we can grow organically,” he noted.
Being a foreign bank, UOB has positioned itself as a niche player with a focus on “mass affluent” customers, Mr Wee said.
“We are a foreign bank but we’re incorporated domestically. We may not go for every segment in the market,” he added.
“While a local bank will do everything, we just focus on areas in which we think the bank will have a competitive advantage. At the same time, we have the ability to be more flexible in terms of operations, opening branches, and taking on people, but we will still be very much a niche player.”
“I don’t want to fight for something I cannot win. I want to fight for something that shows I have a value proposition to convince customers to bank with me,” Mr Wee said.
He added UOB is focusing on 6-7 sectors at present.
“Some of t hese sector s includes TMT (telecoms, media and technology) – this is a big industry we support – and of course industrials such as the electric vehicle (EV) space which is big in Thailand.”
UOB is the only bank in Singapore to offer gold custody. The bank, which is the largest importer of gold into China, has signed a memorandum of understanding in the country with Shanghai Gold Exchange.
“But bas ical ly, we are a commercial bank. The gold business is part of our total portfolio of services for our clients.”
While UOB is the second largest foreign bank in Thailand with a market share of about 4%, the lender is the largest foreign bank in Malaysia, where it has had a presence for 73 years and currently holds a market share of about 7%. In Indonesia, the bank holds a small share of the market, but with a population of 300 million, there is still plenty of room to grow.
In Vietnam, UOB is the first Singaporean bank to be incorporated as a local bank in the promising country that has attracted significant foreign direct investment (FDI). Given its regional presence, UOB can complement the local banking industry and try to help Thailand to attract foreign investment to create job opportunities for local people.
“We are the only bank in Singapore that has signed MoUs with investment promotion agencies in four Asean member states, with Thailand being one of them. We are also the only bank to have actually started an FDI unit dedicated to help us market our services for Asean,” he noted.
“If you are interested in Southeast Asia, this is where we can play a role because we have the most comprehensive footprint in the region. That’s the reason we set up this FDI unit so, hopefully, investors coming to Asean can deal with only one bank rather than going to each country and talking to a local bank.”
UOB’s FDI advisory team was set up in Thailand in 2013 and has attracted more than 440 companies to invest in the country, generating 29,000 job opportunities. Since If you are interested in Southeast Asia, this is where we can play a role because we have the most comprehensive footprint in the region. 
2020, the companies UOB has supported have pledged to invest more than S$1.7 billion (US$1.26 billion) in Thailand.
The FDI unit also helps Thai companies expand their business overseas and has so far supported 220 firms in their efforts to venture outside the country. Most of these firms were large businesses, and, according to Mr Wee, this trend was especially driven by the second generation wishing to diversify and not put everything into Thailand.
For small and medium enterprises (SMEs) and also large corporations, UOB helps facilitate cross-border transactions and sometimes trade arrangements, so they gain the benefit of quicker processing and payment, and better financing terms, he noted.
Globally, UOB currently has a presence in 19 countries.
“Definitely, Asean is important for us. This is where our core is,” Mr Wee pointed out.
Being a bank with a regional network, UOB is also able to attract regional talent.
“In order to grow, you need to attract good people. And good people want to have a career that has regional exposure. This is where we can provide a platform for them.”
As UOB is committed to achieving net-zero by 2050, the bank has put considerable effort into helping its clients within the diverse economies of Southeast Asia. It has paid particularly close attention to helping small and mediumsized enterprises (SMEs) smoothly transition towards sustainability.
The region has a population of almost 700 million and is said to be one of the regions that is most vulnerable to the effects of climate change, facing stark consequences ranging from rising sea levels, heat waves and droughts to increasingly severe storms and floods.
Southeast Asia has been reliant on fossil fuels, such as thermal coal, to drive massive economic expansion, urbanisation and industrialisation over the past two decades, and the shift towards decarbonisation could result in trade-offs with real-life consequences.
“UOB is committed to our own transition journey, as well as to supporting our stakeholders in their journeys, where together we can build a sustainable future for Asean,” said Mr Wee.
The bank offers transition finance to help customers have a path towards greater decarbonisation with programmes helping SMEs to go green. The company has also rolled out a sustainability compass to help customers assess how much they have to do in order to move towards meeting ESG standards, he added.
“We support businesses in the transition to a low carbon economy, helping them stay relevant and competitive for the long term.”
In 2023, UOB Group extended S$44.5 billion in sustainable financing to corporations. In Thailand, the lender granted 33.1 billion baht in sustainable financing.
Overall, green, sustainabilitylinked loans and sustainable trade finance across Southeast Asia continues to see strong growth.
In the first nine months of this year, the value of sustainable financing solutions increased 30% to S$53 billion in the promising areas of green data centres, energy transition, food security and industrial sectors, according to UOB.
This growth was driven by the demand for generative artificial intelligence, energy transition and diversification of supply chains needed to power Asean’s economic growth.
UOB has 143 branches across Thailand plus another 44 sales centres, and employs almost 7,000 people. Globally, it operates 420 branches.
Mr Wee says he doesn’t see the banking industry being disrupted by technology, including artificial intelligence (AI).
“I think we’re enabled by technology. At the end of the day, you still need banks. You see so many of these digital companies who want to set up a bank. But, eventually, they fail,” he said.
“You still need banks to support the economy. This is why we, as a commercial bank, like to have a combination of both physical and digital banks. We use technology to help us simplify a lot of processes but in certain areas, you still need a human interface.”
While other banks have closed physical branches due to technology, Mr Wee believes technology can be used to optimise operations at physical branches. Also, the bank needs to ensure connectivity remains relevant.
“We don’t open just for the sake of opening branches. We track customers’ activities. At certain branches, you need people to sell products so you still need humans.
We might need more or less than 140 branches [in Thailand]. This is where we need to calibrate and understand the customers’ behaviours,” Mr Wee noted. As interest rates worldwide are on the decline, Mr Wee said that this might affect the profitability of banks.
“Definitely, with a high interest rate, it will benefit the banks. If interest rates go down, I think the profitability of the bank will decline. But we will make this up by selling products. And if interest rates go down, we will also generate more loan activities as customers are more willing to borrow.”
UOB’s loan growth is still quite good because people are anticipating that interest rates will be reduced, Mr Wee said.
Regarding policy uncertainties under US President-elect Donald Trump, he said Southeast Asia remains attractive and would remain so under the new US administration, which commences next year.
“Many Chinese companies come to Southeast Asia. They have a factory in China producing for the Chinese market and a factory in Thailand to produce for the Asean, European and maybe even the US markets,” he pointed out.
“At the end of the day, if you are a policymaker, you want to ensure your country and consumers have some benefits. Where else in the world can replace China for global factory output? For us, it must be Southeast Asia.”