Founded in 06 August 1935, United Overseas Bank Limited (SGX: U11), or UOB as we are more familiar with, is a leading bank in Asia, and rates among the world’s top banks (Aa1 by Moody’s Investors Service, and AA- by both S&P Global Ratings and Fitch Ratings).

Headquartered in Singapore, with banking subsidiaries in China, Indonesia, Malaysia, Thailand, and Vietnam, UOB currently has a global network of more than 470 branches and offices in 19 markets in Asia Pacific, Europe, and North America, providing a wide range of financial services covering consumer banking, private banking, commercial banking, corporate banking, and institutional banking.

Last Friday (21 March 2025), UOB released its annual report for the financial year ended 31 December 2024 (i.e., FY2024), and in this post, you will find key highlights to take note of, along with details of its upcoming annual general meeting (AGM):

Key Highlights from UOB’s Annual Report

Economic Growth in China and ASEAN amid Macroeconomic & Geopolitical Uncertainties:

  • The recent US Administration’s policy announcements (including higher trade tariffs, an expansionary fiscal stance, and stricter immigration policy) posed increased inflation risks. This is on top of its economic policies potentially weighing down on growth and trade flows globally and in Southeast Asia.
  • While US tariffs carry a knock-on effect on China, where a continued slowdown in its property market will further tamper the country’s trajectory, but its economy would be cushioned to some extent by the government’s stimulus measures.
  • However, ASEAN’s economy remain resilient, supported by a recovery in retail spending from the region’s large and young domestic markets, with total trade flows projected to accelerate from US$3.5 trillion in 2023 to US$4.7 trillion by 2027 – a 34% increase. Foreign Direct Investment (FDI) inflows into ASEAN is also projected to rise from US$234 billion in 2023 to US$312 billion by 2027, and then to US$373 by 2030.

FY2023 Financial Highlights:

  • UOB achieved a record net profit of $6.0 billion, up 6% year on year, led by healthy franchise growth across ASEAN.
  • The Singapore headquartered bank’s total income also grew by 3% from a year ago to S$14.3 billion, underpinned by:
    • a stable net interest income at S$9.7 billion, as proactive balance sheet management and loan growth of 5% cushioned the impact of interest rate cuts
    • a 7% growth in net fee income, led by double-digit growth in wealth management fees from improved investor sentiments and enhancements to its wealth management platforms, with card fees recording a strong growth on an enlarged regional franchise, along with higher loan fees as lending and capital market activities picked up
    • a 10% improvement in other non-interest income, driven by robust customer-related treasury income from increased retail bond sales and strong hedging demands, as well as a good performance from trading and liquidity management activities.
  • Total core operating expenses rose 5% year on year to S$6.1 billion as the bank continued to invest in building regional capabilities, with core cost-to-income ratio at 42.5%.
  • A final dividend payout of S$0.92/share was declared. Together with its interim dividend of S$0.88/share, total dividend for the full year will be S$1.80/share.
  • As part of UOB’s commitment to managing down excess capital, S$2 billion of surplus capital will be used for share buybacks over the coming 3 years. Additionally, a special dividend of S$0.50/share is recommended, with payment over 2 tranches in 2025, in conjunction with UOB’s 90th anniversary this year.

Awards in 2024:

  • UOB was named as the World’s Best SME Bank in 2024 by EuroMoney, as it was being recognised for providing one of the most comprehensive ranges of SME-focused advisory and product solutions for their long-term growth, bolstered by its clear cost on digital and ESG transformation.

Progress of UOB’s 3 Year Transformation Plan:

  • UOB’s Board of Management developed a 3-year transformation plan in 2023 to reshape its business and position the bank for the next stage of growth in connectivity, personalisation, and sustainability, and the bank is making steady progress.
  • Particularly, UOB is the only bank to have signed a Memoranda of Understanding (MOU) with government investment promotion agencies across its key ASEAN markets to facilitate FDI flows into the region – this was helped by the bank’s investments to enhance digital capabilities for its regional trade, supply chain, and cash management platforms.
  • In 2023, UOB has integrated Citigroup’s portfolio in Malaysia and Indonesia, followed by Thailand in 2024, and Vietnam on track to be completed in 2025 – the full integration of Citigroup’s consumer banking businesses from these 4 ASEAN markets with its cross-sell synergies (this has seen UOB being the top card issuer for Visa and Mastercard in ASEAN) is expected to boost the bank’s annualised value by S$1 billion.
  • To help the bank prioritise, formulate, and drive its sustainability strategy, the Sustainability Advisory Panel was set up in 2023 to provide strategic counsel to the bank on opportunities and risks related to nature and biodiversity, and the bank became an early adopter of the Taskforce on Nature-related Financial Disclosures in 2024. In the same year, the bank has also reported that it has exceeded emissions reduction targets across 5 sectors (power, automotive, real estate, construction, and steel), reinforcing its leadership in responsible banking.
  • UOB is committed to providing upskilling, reskilling, and mobility opportunity to help its people stay ahead of the curve in a rapidly-evolving job market. It also launched the ‘Better U’ Pivot Programme in October 2024 to help its employees transition into new roles within the bank through reselling and mentorship.
  • On artificial intelligence (AI) and Generative AI (GenAI) developments, some of the key initiatives rolled out by the bank include the building of its own GenAI platform with guardrails, and experimenting with multiple use-cases in areas such as customer experience and technology development.
  • By 2026, UOB aims to: (i) diversify income by increasing non-interest income to 37% of its total revenue, driven by wealth, trade, and customer advisory; (ii) grow its ASEAN market contribution to 30% of total group income, while maintaining 50% from Singapore; (iii) optimise cost structure to achieve a cost-to-income ratio of in the low 40% range; and (iv) sustain a return on equity (ROE) at around 14%.

Details of UOB’s 83rd AGM

When? Monday, 21 April 2025
Where? Marina Bay Sands Expo & Convention Centre, Level 4 Roselle & Simpor Ballrooms, 10 Bayfront Avenue, Singapore 018956
Time? 3.00pm

The meeting is held in a wholly physical format, with no options for shareholders to participate virtually.

If your shares are held in a CDP account, no pre-registration is required, as verification will be done on the spot. For those whose shares are held in a custodian account, you will need to contact your brokerage to appoint you to attend the meeting as a proxy.

Closing Thoughts

On the whole, it was a pretty robust year in terms of its financial performance for UOB – with its net profit surpassing S$6 billion for the first time. Its 3 business segments to which its total revenue is comprised of, namely net interest income, net fee income, as well as other non-interest income also saw stable growths.

On top of its final dividend of S$0.92/share, shareholders will also receive half of the special dividends (amounting to S$0.25/share) declared – bringing the total amount to S$1.17/share, with the remaining S$0.25/share to be paid out together with the bank’s interim dividend payout for 2025.

One thing that caught my eye in UOB’s annual report are the 3 targets set by the management to be achieved by the year 2026, as follows: (i) non-interest income to comprise 37% of its total income, (ii) ASEAN to contribute 30% of UOB’s total income, with another 50% coming from Singapore, (iii) cost-to-income ratio in the low 40% range, and (iv) an ROE at around 14%. This is something I’m definitely keeping in mind and see if the bank is able to achieve.

Moving forward, one thing I’m looking forward to is the topic on ‘leadership renewal’ – where I did not find any discussions by the bank on this front in its latest annual report. Considering its Chairman Mr Wong Kan Seng is already 78 years of age, and its Deputy Chairman and CEO Mr Wee Ee Cheong is 72, in my opinion, it will be good for the bank to share on its plans on this with the shareholders.

With this in mind, I have submitted the following question to the bank’s management team (if you have any questions for the management, you can submit them via email to uob_agm@uobgroup.com before 5pm on 4 April 2025):

“Considering that the bank’s Chairman, Mr Wong Kan Seng, is currently 78 years old, and the Deputy Chairman and CEO, Mr Wee Ee Cheong, is 72, I would like to enquire about the bank’s leadership succession plans. Specifically, is there a structured plan in place, and is the bank considering a successor from within the family or open to appointing someone from outside the family?

In addition, I would appreciate it if you could share whether there is a timeline for refreshing the broader management team, as I observe that many members are currently above the age of 60.”

With that, I have come to the end of my summary of UOB’s latest annual report for the financial year 2024 ended 31 December. Please note that all the opinions you find in this post are for educational purposes only, and they do not constitute any buy or sell calls for UOB’s shares. You should always do your own due diligence before you make any investment decisions.

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Disclaimer: At the time of writing, I am a shareholder of United Overseas Bank Limited.

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