Had Wee Ee Cheong, deputy chairman and CEO of United Overseas Bank U11 (UOB), not followed in the footsteps of his father and grandfather, he likely would have been a doctor today.
But as fate would have it, the third-generation leader of the Singapore-based lender, which turns 90 next year, joined the family business in 1979 at the behest of his father, the late Wee Cho Yaw.
UOB, the third-largest banking group in Asean by assets today, was founded in 1935 by his grandfather, Sarawak-born Wee Kheng Chiang. “I had always wanted to be a doctor,” Wee, 71, tells The Edge in his first ever interview with the Malaysian media in Kuala Lumpur recently.
However, this was a difficult dream to achieve as his father, a stickler for Asian values and culture at a time when Singapore was under British rule, had put all his children through Chinese schools. Hence, pursuing medicine in the English language was not a viable option.
Wee’s father, who many saw as one of Singapore’s most accomplished entrepreneurs, sent him to the US for higher education.
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Wee struggled with the transition to the English language, but he persevered and joined UOB after graduating.
“Culture was very important to my father,” Wee recalls. “Today, I am effectively bilingual. I go to China and elsewhere, and I’m better off than some of my colleagues who speak only English. But it took a long time [to get there].”
This advantage stood UOB in good stead among the small and medium enterprises (SMEs) in Singapore, many of which were run by Chinese-educated businessmen, he says.
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UOB has won accolades for being the best SME bank — not only in the island republic, but also in Asia and globally.
“The ability to deal with the Chinese customer, the ability to understand them, to persevere … that formed the culture of the organisation, to a certain extent,” says Wee, who has notched up more than 40 years as a banker. He was appointed deputy chairman in March 2000 and became CEO in April 2007. His father’s emphasis on culture has stayed with him.
Throughout the 1½-hour interview, he kept coming back to the topic of people, values and culture. He sees these as important for UOB to stand the test of time.
“It’s important to me that we build the right culture. Just like the roots of a tree, the culture is important. If you don’t have the right roots, the tree will not survive,” says Wee.
UOB wants to grow its own “timber”, he says, referring to employees who remain loyal to the group and grow with it. “My people have been with the bank for 30, 40, 50 years. And we have new people who come in for five, 10, 20 years. These people work together and share the same culture. So, hopefully that can continue,” he says.
The group’s philosophy is to ensure the staff is taken care of, so that they are not easily enticed by other companies, says Wee. He wants them to have a long-term growth mindset.
UOB provides its employees with housing loans at cost and medical services, among others. “They need to feel good to work well. How much time do they spend here? Probably more than with their families. So, we have to do the right thing,” he remarks.
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The group’s staff attrition rate is below the industry standard, Wee points out, without elaborating. Culture is not something easy to ingrain in the staff, he muses. “This is what keeps me awake at night. There’s no perfect solution. But at the end of the day, it starts from the top.”
Wee shares that 30% of the key performance indicators (KPIs) of senior management is weighted on values. UOB’s values are honour, enterprise, unity and commitment.
Deeply entrenched in Asean
UOB has a global network of 500 branches and offices across 19 countries, but it remains very much an Asean-focused lender, with subsidiaries in Malaysia, Indonesia, Thailand and Vietnam, as well as China.
It also serves the region through its digital platform UOB TMRW. UOB’s assets stood at $516.74 billion at end-June.
For perspective, DBS Group Holdings, the largest lender in Asean, had $790.11 billion in assets, while the second largest, Oversea-Chinese Banking Corp (OCBC), had $598.89 billion.
It was under the leadership of Wee’s father, spanning more than five decades, that UOB grew into a regional entity, both organically and via the acquisitions of other lenders, including Chung Khiaw Bank and Overseas Union Bank.
The group’s assets rose from just $2.8 billion in 1974 to over $253 billion when Cho Yaw retired as chairman in 2013. He died in February this year at the age of 95 while holding the role of chairman emeritus and adviser.
After a lull in acquisitions, in early 2022 — this time with Wee at the helm — UOB made the move to buy Citigroup’s consumer banking businesses in Malaysia, Indonesia, Thailand and Vietnam for about $5 billion.
It was a strategic decision that enabled the group to immediately scale up as it gained about 2.4 million customers from Citigroup.
Wee has no intention of undertaking any mergers and acquisitions (M&A) anytime soon, unless a compelling opportunity presents itself. He also sees no reason to be physically present in the Asean markets that it is not currently in. “Malaysia, Vietnam, Indonesia and Thailand already form 80% of the whole Asean market. These are the ‘big tigers’. If I can manage that, no problem. I’m already home,” he remarks.
Undertaking M&A is not easy, Wee points out. “When you acquire a bank, you take on both the good and the bad, including the people. Then, it becomes a human resources exercise. In UOB’s history, we have acquired eight banks and we know how painful it is to acquire.
“So, I think we have enough presence in Asean. We see an opportunity for us to grow organically. I don’t have to make another acquisition.”
Last year, the group reported a record core net profit — that is, excluding one-off expenses related to its acquisition of Citigroup’s consumer banking businesses in Malaysia, Thailand and Vietnam — of $6.1 billion, up 26% year on year (y-o-y). Its core return on equity stood at 14.2%, an increase of 2.3 percentage points y-o-y. This year, the target is to sustain it at 14%.
More recently, UOB reported a core net profit of $3.05 billion in 1HFY2024, marginally lower from $3.08 billion in the previous corresponding period, with its earnings supported by double-digit fee income growth and lower credit allowances.
Including the one-off Citigroup integration expenses, its net profit stood at $2.9 billion.
The results came in within analysts’ expectations. Within Asean, Malaysia is the biggest contributor to its earnings.
Wee is excited about the prospects of the Johor-Singapore Special Economic Zone (SEZ). In an Aug 29 press statement, UOB announced that it was the first Singapore bank to partner with Invest Johor to drive foreign direct investments into the SEZ.
Banking analysts see UOB and OCBC as being the key beneficiaries among Singapore banks of the closer integration between Singapore and Johor, especially with increased SEZ activities.
In 2023, Malaysia accounted for 9% of UOB’s pre-tax earnings while Malaysian loans accounted for 10% of its loans, notes Singapore-based analyst Thilan Wickramasinghe of Maybank Investment Banking Group (MIBG) Research.
“Both banks [UOB and OCBC] should have critical advantages from their SME customer base as they look to take advantage of cost advantages and labour availability in the SEZ. UOB should also see improved retail traction following its integration with Citibank’s franchise in Malaysia and increased cross-border travel and tourism credit card spending,” he says in an MIBG Research report on the SEZ in April.
In a more recent report, Wickramasinghe points out that UOB is the country’s largest SME lender, with “strong legacy relationships, resulting in higher lending yields than peers”.
As at Aug 30, UOB’s share price had gained 10.3% year to date to close at $31.39 for a market value of $52.51 billion. Bloomberg data show that eight analysts have a “buy” call on the stock while nine have a “hold” and one “sell”. The average 12-month target price was $34.16.
Succession plan
After more than 40 years with the bank, 17 of which as CEO, Wee is often asked about succession planning. The father of two sons and a daughter says he leaves it to his children to decide if they want to continue the family’s legacy at UOB.
The Wee family has a stake of around 10% in the bank. “My children are not involved in this business; they choose not to be. They want to have their own dream, so be it. Ultimately, it can be professionally run and hopefully, they can be at a board level. They can preserve the [family’s] legacy if they want to. So, I’m not hung up on being a family-run bank,” he says.
Wee likes to carve out time for himself on weekends. “I like to keep myself healthy — that’s important. I do walk a lot. I used to play a lot of tennis, and even represented the country. My father’s house has a tennis court, so my whole life was about playing tennis. But when you play too much, you give up.
“This is why my advice to my children and grandchildren is, don’t spend all your time playing just one sport. After a while, you get fatigued. You never go back to it again. Diversify, play other sports. Then, you will persevere.”
These words of wisdom also likely explain UOB’s strategy of diversifying into other countries over the years.
Does Wee have any regrets about not becoming a doctor? “No, no, no,” he laughs. “I have been with the bank for over 40 years. I think that is my responsibility. The bank was started by my grandfather, and my late father just passed away six months ago. I persevere.
“My next mission is to make sure there are younger colleagues who can take over. It’s a marathon, right? Hopefully I can provide them with, not intelligence, but wisdom.”
