United Overseas Bank (UOB) has completed a capital injection of RMB2 billion ($425 million) to its subsidiary in China to strengthen its connectivity, progressive solutions and sustainability capabilities.
This is UOB’s second capital injection to UOB China, following the increase in the bank’s registered capital from RMB3 billion to RMB5.5 billion in 2015.
UOB China has maintained robust compound annual revenue growth of 13% since its inception in 2008. Its net profit before tax hit a record high in 2021, more than double that in 2018, the company said in a statement.
UOB is investing in its capabilities to support closer connectivity between China and Asean amid enhanced intra-regional connectivity coupled with increased cross border trade and investments, said Wee Ee Cheong, deputy chairman and CEO of UOB as well as chairman of UOB China.
“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,” he added.
Asean was China’s top trade partner with bilateral trade amounting to RMB5.67 trillion in 2021, an increase of 19.7% y-o-y. Tapping on the group’s network strengths, partnership ecosystem and in-market expertise, UOB China seeks to assist Chinese companies to expand into Asean and vice versa.
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On the back of China’s financial liberalisation, the bank will continue to develop financial solutions to meet its clients’ cross-border needs.
UOB China plans to enhance its position on Asean currency/RMB market making and hedging services to help more clients manage their foreign risk exposures. With the fresh capital, the bank also aims to provide clients with more solutions on commodities hedging and rates.
To push its sustainability strategy, the bank will 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.
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UOB China president and CEO Peter Foo said China is spearheading efforts to drive sustainable trade and investment flows through the dual circulation strategy and to build a greener and upgraded economy.
“Our investment in these three areas not only enables us to achieve long-term growth that is balanced with stability, but also positions us well to help our clients transform with China’s economy and to forge a sustainable future for all.”
Shares in UOB closed 28 cents lower or 0.93% down at $29.73 on Jan 25.
Photo: Bloomberg
