UOB's Greater China loans double to S$25b over 3 years

UNITED Overseas Bank's strategy of financing Chinese companies investing overseas is paying off, with cross borders loans doubling from three years ago to S$25.1 billion.

As Chinese companies expand along the One Belt One Road (OBOR) trade routes and as trade and investment between China and South-east Asia continues to grow, UOB has also doubled its cross-border financing to these companies over the last three years, it said on Thursday.

Loans to Greater China as at end-September 2015 rose to S$25.1 billion, almost double than S$12.3 billion in 2013.

"The bulk of the S$25.1 billion is from cross-border loans," said UOB spokeswoman Kelyn Tan.

These loans were provided to companies investing in industries such as real estate, trading, natural resources and the consumer products and services sector, UOB said.

Since 2011, UOB has had a team dedicated to helping businesses seize new opportunities in the region. UOB's Foreign Direct Investment (FDI) Advisory Unit has to date facilitated the regional business expansion and investment plans of close to 600 new customers along the OBOR trade routes.

More than one-third of the new customers came on board in the first 10 months of this year.

Compared with the same period last year, Chinese FDI into countries along the OBOR trade routes from January to August 2015 rose 48.2 per cent year-on-year to US$10.7 billion while FDI into China amounted to US$3.6 billion, according to China's Ministry of Commerce.

Said Ian Wong, UOB head of group strategy and international management: "Our customers are tapping on the large-scale infrastructure projects and increasing trade flows along the OBOR trade routes to deepen their presence across geographies."

Singapore is at the heart of intra-regional trade and investment flows between China and South-east Asia, he said. In particular, Singapore accounted for 85 per cent of the total FDI into China from countries along the OBOR routes.

The OBOR is an initiative that China proposed to increase its connectivity and cooperation with other countries. It comprises the land-based Silk Road Economic Belt that focuses on China's links with Central Asia, West Asia, the Middle East, and Europe, and the 21st Maritime Silk Road aimed at increasing collaboration with South-east Asia, India and North Africa.

Mr Wong said UOB has a strong advantage in helping customers capitalise on the business opportunities arising from the increased connectivity between China and South-east Asia.

Singapore's third largest bank has the biggest network in South-east Asia among the three local banks. In July 2015, a Business Times report said UOB's South-east Asian network has 484 branches and offices. Rivals OCBC Bank has 443 branches and offices while DBS Bank has 135 branches and offices.

On Thursday UOB also officially opened its Suzhou branch, its 17th branch in China. Including four non-banking subsidiaries and associates, UOB has 21 branches and offices in China.