UOBM Investment Highlights
UOBM: Investment Highlights
Strong Credit Ratings & Strategic Importance:
Rated AAA (RAM), Tier 2s at AA1.
100% owned by UOB Group (Aa1 Moody's, AA- S&P, AA- Fitch).
Strategic asset and profit contributor.
Proven Track Record & Profitability:
1Q25 Return on Equity: 13.2%.
Largest foreign bank in Malaysia by assets.
PBT CAGR (2020-2024): 13.4%.
Strong Capital and Liquidity:
CET1: 15.1%, Total CAR: 18.4% (as of Mar 31, 2025).
LCR: 147.4% (as of Mar 31, 2025).
Prudent Reserve Coverage:
Diversified loan portfolio.
Loan loss coverage: 90% (as of 1Q25).
NPL%: 2.2% (as of 1Q25).
UOB Overview
Founding:
Founded in 1935 by Chinese businessmen and Datuk Wee Kheng Chiang.
Expansion:
Grown organically and through acquisitions, with a presence in 19 countries and territories.
Key Statistics for 1Q25:
Gross loans: SGD341b (USD254b).
Customer deposits: SGD401b (USD299b).
Loan / Deposit ratio: 84.0%.
Net stable funding ratio: 116%.
All-currency liquidity coverage ratio: 143%.
Common Equity Tier 1 ratio: 15.5%.
Leverage ratio: 7.3%.
Return on equity: 12.3%.
Return on assets: 1.11%.
Net interest margin: 2.00%.
Non-interest income / Total income: 34.1%.
Cost / Income: 42.6%.
Non-performing loan ratio: 1.6%.
Credit Ratings:
Moody's: Aa1 (Stable), P-1.
S&P: AA- (Stable), A-1+.
Fitch: AA- (Stable), F1+.
Proven Track Record
Management Stability:
Proven track record in navigating global events.
Stable management team ensures consistent strategy execution.
Disciplined management supports resilience and performance.
NPAT Trend:
Consistent growth in Net Profit After Tax (NPAT) over the years, driven by organic growth and strategic acquisitions.
NPAT in 2024: $6,045m.
Comprehensive Regional Banking Franchise
Extensive Regional Footprint:
Presence in multiple countries including Myanmar, Greater China, Thailand, Malaysia, Vietnam, Philippines, Singapore, Australia, and Indonesia.
Most diverse regional franchise among Singapore banks.
1Q25 Performance by Segment:
Group Wholesale Banking Income: SGD1.7b.
Group Income: SGD1.3b, Assets under management: SGD189b.
Comparison Against Peers
Standalone Strength:
UOB has competitive credit ratings from Moody's, S&P, and Fitch.
Cost Management:
Cost/income ratio: 43%.
Liquidity:
Loan/deposit ratio: 84%.
Returns:
Return on average assets (annualized) ratio: 1.1%.
Capital and Leverage Ratios
Common Equity Tier 1 CAR:
UOB's Common Equity Tier 1 Capital Adequacy Ratio (CAR) is competitive compared to peers.
Fully-loaded: 15.5%.
Return on Average Equity:
12.3%.
Reported Leverage Ratio:
7.3%.
Strong Investment Grade Credit Ratings
Ratings:
Moody's: Aa1 / P-1.
S&P Global: AA- / A-1+.
Fitch Ratings: AA- / F1+.
Debt Class:
Senior (50%).
Covered (24%).
Tier 2 (14%).
Add Tier 1 (12%).
Exposure to Greater China
Exposure Breakdown (Mar-25):
Total Exposure: $73.7b.
Bank: $8.0b.
Non-Bank: $51.1b.
Bank Exposure (Mainland China):
35% of total exposure to Mainland China.
100% with <1 year tenor.
Non-Bank Exposure (Mainland China):
65% denominated in RMB and 65% with <1 year tenor.
NPL ratio at 3.5%.
Exposure to Commercial Real Estate - Office
Office exposure is 6.9% of loans.
More than half of office exposure is in Singapore.
Overseas exposure backed by strong sponsors.
Largely secured by class-A office properties.
Average LTV around 50%.
UOBM Overview
Background:
Entity name: United Overseas Bank (Malaysia) Bhd (UOBM).
Shareholders: United Overseas Bank Ltd, Singapore (55.3%) and CHUNG KHIAW (MALAYSIA) BERHAD (44.7%).
Key Statistics for 1Q'25:
Total Assets: RM154b.
Shareholder's Equity: RM16b.
Gross Loans: RM110b.
Customer Deposits: RM115b.
Loans/Deposits ratio: 93.4%.
Common Equity Tier 1/Tier 1 CAR: 15.1%.
Total CAR: 18.4%.
All-currency liquidity coverage ratio: 147.4%.
Return on equity: 13.2%.
Return on assets: 1.3%.
Non NII/Total Income: 34.2%.
Cost Income: 46.8%.
Gross NPL Ratio: 2.2%.
Business Overview:
Incorporated in 1993, with a presence in Malaysia since 1951.
One of the leading locally incorporated foreign banks in Malaysia.
Largest conventional branch network owned by a foreign bank (55 branches).
Among UOB Group's largest subsidiary and profit contributor.
Credit Rating: AAA/ Stable/ P1 (RAM).
UOBM Competitive Against Peers - FY2024
Profitability:
Return on Equity: UOBM 11.6%.
Cost/Income ratio: UOBM 49.6%.
Asset Quality:
Non-Performing Loan ratio: UOBM 2.2%.
Loan Loss Coverage: UOBM 103.0%.
Funding:
Loan/Deposit ratio: UOBM 93.5%.
Average Liquidity Coverage ratio: UOBM 155.0%.
Capital:
Common Equity Tier 1 ratio: UOBM 15.0%.
Total CAR ratio: UOBM 18.3%.
Longstanding Presence in Malaysia since 1951
Timeline:
1951: Opened first branch in Ipoh, Malaysia.
1962: Launched "Why Woman need Banking Account" campaign and "Lady-in-Pink" services.
1971: Acquired Lee Wah Bank Ltd and its branch network in Singapore & Malaysia.
1993: UOBM incorporated as a subsidiary of UOB Limited.
2002: Merged UOBM and Overseas Union Bank (M) Berhad.
2016: Launched Islamic Banking Window.
2017: Digitalisation: Launched Mighty Mobile App, PIB Next Gen, BIB Plus.
2022: Acquired Citigroup's consumer banking business in Malaysia.
2023: Successful OD1 migration of Citi customers.
2024: UOB Plaza 1 KL awarded GreenRE platinum certification.
UOBM's Proven Track Record and Achievements
NPBT (RM'm):
Consistent growth in Net Profit Before Tax (NPBT) over the years.
2024: Record Profit 2,225
Timeline Highlights:
2002: Merger with Overseas Union Bank (M) Berhad.
2011: Top Foreign Bank in loans.
2015: 1st foreign bank to issue RM1b Basel III sub-debts.
2016: UOB Plaza 1 KL opening.
2022: Citi consumer banking business acquisition.
Diversified loan portfolio
Economic Sectors:
Household - Purchase of Residential Property (38%).
Manufacturing (11%).
Wholesale-Retail trade, restaurant & hotels (10%).
Segment:
Individuals (52%).
Domestic Business Enterprise (42%).
Steady Loan Growth and Healthy Reserve
Gross Loans and NIM:
Steady growth in gross loans.
*Prudent Reserve Coverage: NPL stable trends
*NIM at 2.26%
Diversified Funding and Strong Capitalisation
Predominantly Deposit Funded:
High Loan-to-Deposit Ratio (LDR).
Strong CASA Growth: growing CASA ratio
Strong Investment Grade Ratings from RAM
UOBM - AAA Financial Institution Rating (FIR) by RAM
Strategically important to parent
Robust capitalization
Strong funding profile
Robust profitability with diversified earnings
Sound asset quality
UOBM Islamic Banking Outlook
Historical Background
Established since 2016 with full product suites covering all business segments.
Strategies are aligned to UOBM's including sustainability agenda, franchise building and market positioning.
Leverages the infrastructure of UOBM to ensure cost effectiveness and competitive efficiencies.
4-year CAGR of both Assets and Liabilities -17%.
Steady Growth in Assets, Liabilities and Income.
Key Milestones
UOBM Islamic Banking Business Strategies & Outlook 2025
PFS: Home Financing-i as the key growth area & deposit acquisition
WB: Focus on Targeted WB Business & Support for SMEs
IB: Leveraging Investment Banking Deals
GM: Derivatives as the main driver to secure fees along with FX flow
Building Scale for Future Focus in Sustainability by Expanding Product Suite
Q&A
Some key points from the Q&A section:
Malaysia trade loan is roughly 30-40% with tenure around 3-4 months, NPL does not look to be rising.
Currently CET-1 15+%, target 14-15% level
Net zero target in 2022. Well on target,
Close at 2.11% NIM last year, Q1 improve further due to CASA and fed rate cut, moving forward, NIM will be depended on OPR movement.
Target CASA Level >40%.
Acquisition not very significant 10-15% of the portfolio.
LTD level comfortable at 90%.
90% of loan are floating the rest are fixed cuz they don’t really do hire purchase
*Target cost-to- income ratio at 45%