UOB injects 2b yuan in China subsidiary

UOB has injected 2 billion yuan (S$424.8 million) in its subsidiary in China, which will be channelled into regional opportunities, sustainability and financial solutions such as hedging services.

UOB China has maintained a compound annual revenue growth of 13 per cent since it was incorporated in 2008, UOB said in a statement. Net profit before tax hit a record high last year and more than doubled from 2018.

Tapping on the demand for Chinese companies to expand to Asean and vice versa, UOB China plans to establish and expand client relations in sectors that are strong drivers of China's economy. It will also strengthen its strategic partnership with Hengfeng Bank by tapping crossborder business opportunities.

"We will strengthen our support to our clients as they take advantage of the opportunities arising from regional connectivity initiatives, such as the newly-enforced Regional Comprehensive Economic Partnership," said Wee Ee Cheong, deputy chairman and chief executive of UOB and chairman of UOB China.

Last year, Asean was China's top trade partner with bilateral trade amounting to 5.67 trillion yuan, an increase of 19.7 per cent year on year.

On the back of China's financial liberalisation, UOB China plans to improve its Asean currency/yuan market-making and hedging services to help more clients manage their foreign risk exposures. It also aims to provide clients with more solutions on commodities hedging and rates.

The bank noted China's efforts to drive sustainable trade and investment flows through its "dual circulation strategy" - focusing on the domestic market - and to build a greener economy.

UOB China recorded a double-digit growth last year in the number of clients taking up its green financing solutions. Green financing was extended to clients with projects involving electrical vehicles, real estate, solar panels and plastic recycling.

The bank plans to support key sectors that align with China's carbon emission reduction action plan in areas such as renewable energy, energy saving projects and industrial upgrades, as well as sectors involved in the circular economy.

This is UOB's second capital injection in UOB China, following the increase in the bank's registered capital from 3 billion yuan to 5.5 billion yuan in 2015.

Shares in UOB closed at S$29.73 on Tuesday (Jan 25), down S$0.28 or 0.93 per cent.