Veteran Chairman of UOB Bank Wee to Step Down
Kevin Lim and Charmian Kok
Singapore. United Overseas Bank, which on Tuesday capped a strong earnings season for Singapore banks with a better-than-expected profit rise, said its long-time chairman is stepping down next year in a surprise move.
The lender also said it was interested in buying the Asian asset management businesses belonging to Dutch bank and insurer ING — which has a portfolio valued at about $54 billion — if the price was right.
Wee Cho Yaw, who turns 84 next year and whose family controls UOB, will step down as chairman in April, his son and UOB Chief Executive Wee Ee Cheong said at an earnings briefing.
The elder Wee became chairman and chief executive of UOB in 1974 but relinquished his CEO position to Wee Ee Cheong in April 2007, according to the bank’s latest annual report.
Singapore’s third richest man according to Forbes magazine, had never indicated any retirement plans and had been upset when reporters raised the subject.
Wee, who will continue to advise the bank in an honorary role of Chairman Emeritus, oversaw UOB’s expansion from a tiny lender with just one branch in Singapore into a regional giant with large operations in Singapore, Malaysia, Thailand and Indonesia.
Hsieh Fu Hua, a former CEO of stock exchange operator Singapore Exchange, will become the non-executive chairman of Singapore’s third-biggest bank, UOB said.
Hsieh is currently a member of UOB’s board as well as a director at state investor Temasek, which controls rival DBS Group as well as many of the Southeast Asian city-state’s biggest companies such as Singapore Airlines and SingTel.
“It’s a natural progression. Hsieh has a lot of experience from his days at SGX, be it with regulations, governance, or strategy,” said Ng Kian Teck, lead analyst at SIAS Research.
Wee Ee Cheong said the impending change of chairman will not have any effect on UOB’s strategy of regional expansion and focusing on fee-based income from services such as wealth and asset management which the bank had embarked on in recent years.
UOB also confirmed interest in assets belonging to ING for the first time, after a report in May that it was on a short list of suitors for its Asian asset management businesses. But CEO Wee said on Tuesday a lot depends on the price.
“As an organization, our capital is strong so we should take advantage of that,” CEO Wee said.
UOB’s core tier one capital is 12.3 percent, well above the minimum required by the Monetary Authority of Singapore and higher than most global banks.
“Fund management can provide quite a steady stream of income for banks,” SIAS’s analyst Ng said, adding it could be a driver for profits in a low interest rate environment.
ING is being forced to sell assets in return for receiving state aid during the global financial crisis.
UOB said second-quarter profit to the end of June rose 12 percent to S$713 million ($574.77 million), beating the S$622 million average estimate of six analysts polled by Thomson Reuters.
Its results were consistent with rivals DBS Group and Oversea-Chinese Banking Corp, which last week reported better-than-expected earnings but warned of pressure on interest margins amid a regional slowdown.
UOB reported net customer loans growth of 14.3 percent from a year earlier, while net interest income climbed 7.4 percent amid growth in higher-margin markets such as Thailand.
Fee and commission income in April to June hit a new quarterly high of S$386 million, driven by strong loans processing and corporate finance activities, UOB said.