‘We are a big tanker; we are shifting’: UOB’s Wee Ee Cheong takes long-term view on trade loans
[SINGAPORE] Trade loans remain a relatively small portion of UOB’s total portfolio, but their contribution to the bank’s balance sheet is expected to become more visible over time, said its top executives.
“We are a big tanker; we are shifting,” said Wee Ee Cheong, deputy chairman and chief executive officer of UOB. “Two, three years from now, you can start to see (the impact) in our balance sheet.”
He was speaking at the bank’s second-quarter earnings call on Thursday (Aug 7), for the three months ended Jun 30, 2025.
UOB’s trade loan portfolio rose 12 per cent year on year in the first half of FY2025, noted group chief financial officer Leong Yung Chee. “You see the green shoots already,” he said. “You look at the customer treasury income that we are able to generate from them, that has actually been growing very strongly.”
Customers taking trade loans often rely on the bank for broader financial services such as hedging. Leong said that relationship can deepen further if UOB is proactive, eventually leading to the opening of current and savings accounts (Casa).
The bank’s Casa ratio – a key measure of low-cost funding – stands at 57 per cent for its wholesale banking operations, comparable to the 56 per cent ratio in its retail business.
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“These are very important elements in terms of looking at how to grow the stickiness of the franchise, and shape it so that you have a better proposition,” said Leong.
M&A strategy
Also at the briefing, Wee and Leong elaborated on the bank’s approach to mergers and acquisitions (M&A), which they characterised as targeted and long-term in nature.
“We’re always on the lookout,” said Wee. “If there is anything coming along, why not?”
He pointed to UOB’s 2022 acquisition of Citigroup’s consumer banking franchises in Indonesia, Malaysia, Thailand and Vietnam for S$4.9 billion as an example of the kind of deal the bank would pursue.
The acquisition gave UOB a “good head start” in those markets, where competition from domestic players is strong, Wee added.
Leong said that, looking ahead, the bank is focusing on M&A that builds skills or capabilities, rather than simply expanding physical footprint through more branches or ATMs.
He noted that UOB’s previous M&A deal before the Citigroup acquisition was 15 years ago. “We take M&A very seriously, and it’s not (just) an exercise,” he said.
