Setting the year in context
2020 saw two major issues continue to cast their long shadows on the world economy. The first was defining for our time. COVID-19 has wrought inconceivable change to economies and upended livelihoods around the world. More critically, by the close of February 2021, 113 million people had been infected by the virus and more than two million lives had been tragically lost. Vaccination programmes are underway in many countries. There is hope that more economic activities will resume and people will adapt to the demands of the new environment. However, overall recovery will not come quickly. The economic implications and governments’ policy responses will likewise take a while to play out.
Geopolitical instability arising from the US-China strategic competition was the other major concern. The turbulent relationship hit its lowest point in decades, extending to many sectors including finance. It will take time for the new US administration and China to work out a modus vivendi and come to terms with each other. The hope is for both sides to lean towards cooperation instead of confrontation, paving the way to a more constructive relationship.
Fraught as the year was with its unprecedented difficulties, UOB achieved net profit of $2.91 billion for 2020, 33 per cent lower than the year before. Following the Monetary Authority of Singapore’s guidance on a dividend cap for 2020, the Board recommends a final dividend of 39 cents per ordinary share. Together with the interim dividend of 39 cents per ordinary share, this takes the total dividend for 2020 to 78 cents.
Supporting through trying times
Exceptional times call for exceptional handling. Given the extent and effects of the pandemic, the Board and Management worked swiftly to address the immediate impact on our stakeholders.
The Board supported Management’s considered and prompt measures to help see our customers through these tough times. UOB was the first bank in Singapore to announce a liquidity relief programme for affected businesses. For our communities, we provided essential supplies to help those affected by COVID-19 and stepped up our programmes to help the underprivileged. We were conscious of its stress on our colleagues and we emphasised the need for their continued safety, engagement and mental well-being. We paid close attention to the impact of COVID-19 on our business strategy and stress-tested scenarios to ensure our readiness to cope with the challenges.
In light of the very fluid situation in the past year, the Board and its committees decided to meet more regularly than the scheduled quarterly meetings. I chaired 11 Exco sessions which were mostly attended by the other directors too. From the beginning of the Circuit Breaker in Singapore, we moved all our meetings and related activities online. In June, we held our first virtual Annual General Meeting with a live webcast. It was another sign of the times.
COVID-19 accelerated the acceptance and adoption of technology. Work behaviours and spaces were switched from the physical to the virtual. At UOB, within a month we enabled 80 per cent of our people across the Group to work from home and to equip themselves with skills for the future.
Steering for long-term growth
At our annual strategy meeting last November, the Board and Management reviewed the Group’s progress on our transformation journey and our digital strategy in a post-pandemic world. The region, across which we have built our franchise, continues to prove its potential with trade flows and supply chains shifting in its favour. In connecting businesses to opportunities across ASEAN and with Greater China, we sharpened our sector solutions capabilities.
Our significant investments in our digital capabilities enable us to roll out innovative products and services and to enhance our channels and platforms such as UOB Mighty, UOB Infinity and our mobile-only digital bank, TMRW. In August, we launched TMRW in Indonesia – our second ASEAN market after Thailand. Our investments are reaping the desired results in market and enable us to scale our business across the Group. We are well-positioned to serve our customers best in the changing competitive landscape which will include the new digital bank licensees.
Technology and digitalisation also help boost our productivity, compliance and resilience. They gird us in cybersecurity and in our combat against increased sophistication in financial crime. We pioneered an artificial intelligence-backed anti-money laundering solution that identifies suspicious transactions and connections. Across the organisation, we deepened our risk culture.
The Board was also active in determining the Group’s sustainability approach and in ensuring that environmental, social and governance considerations, such as climate change, financial inclusion and information security and data privacy, are embedded into our decision-making. In integrating sustainability into our business strategy, risk management, product development and customer engagement, we are forging a sustainable future with our stakeholders.
As part of our Board succession plans, we welcomed Dr Chia Tai Tee to the Board on
1 October 2020. He was also appointed to the Audit and Board Risk Management Committees.
As part of our Board succession plans, we welcomed Dr Chia Tai Tee to the Board on 1 October 2020. He was also appointed to the Audit and Board Risk Management Committees.
Acknowledging contributions
On behalf of the Board, I thank Mrs Lim Hwee Hua for her insight and contributions as director for almost seven years and wish her the best as she retires. We also appreciate the efforts of Management and our people who demonstrated the strength of UOB’s values of Honour, Enterprise, Unity and Commitment throughout the very challenging year.
We also thank our shareholders, customers, partners and the community for their continued trust in us.
Wong Kan Seng
Chairman
February 2021
