UOB beats its drums over China business

UNITED Overseas Bank (UOB) sounded a positive note over its business in China on Wednesday, with plans to boost the number of branches it operates there as well as to expand its retail network.

This comes as the bank's China unit has grown its revenue by at least 10 per cent every year for the past five years, and plans to at least maintain this pace of growth over the next five years.

"We are going to more than double the number of banking network from eight to 17 by end of the year, including one in Chongqing that will open this coming Friday, as well as one in Suzhou by end of the year," said Eric Lian, CEO of UOB (China). This will put the bank in 11 major cities across China, he added.

Over the past 12 months, UOB has increased its branch network by 30 per cent to 16 branches and sub-branches. This includes its sub-branch in the Shanghai Free Trade Zone, which opened in June.

It plans to boost its funding activities in the key industries of oil and gas, telecommunications, transportation, F&B, as well as property, said Mr Lian. The bank will also focus on markets with increasing cross-border trade and investment needs, such as the Pearl River Delta, Yangtze River Delta and South-western China, he added.

"For retail banking, we will focus on understanding our customers' individual needs and risk appetite and providing them with the products and services that are suitable for their lifestyle needs. We will also consider further expanding our retail banking reach to serve the middle income segment when the time is right."

UOB said on Tuesday it had renewed a memorandum of understanding with the China Council for the Promotion of International Trade to support companies in sectors such as commodities, infrastructure, and manufacturing.

DBS and OCBC had cut their overall Greater China exposure in the second quarter from a quarter ago.

For DBS, this reflected risk assessment, while OCBC said this was as the gap between the borrowing rates for onshore and offshore yuan had been significantly reduced, leaving less room for funding activity.

Conversely, UOB boosted its presence there in the second quarter from a quarter ago, though this is still much lower than its peers, analysts said.

The UOB Asian Enterprise Survey published this week showed four out of 10 Chinese companies are looking at South-east Asian markets as their next expansion destination. Singapore was the top South-east Asian expansion destination for 38 per cent of respondents.