“Build and Rebuild” is the title of the painting on the cover of this year’s Annual Report. It depicts construction, de-construction and rebuilding following unprecedented changes. It is a reminder that while the world has gone through an intense period of change in the past few years, we also have the capacity to transform and to regenerate.

This has been the case for UOB. We have emerged stronger and better since the pandemic. Amid the sea of changes, we remain steadfast in our commitment to doing right by our customers. We are progressively building our scale and franchise in ASEAN as we build a brighter future together.

In 2023, the global economy faced uncertainties and challenges. Global economic activity moderated on the back of slower demand in the Eurozone and China. The US economy was unexpectedly resilient and averted a slowdown. Closer to home, the ASEAN economies recovered well from the ravage of the pandemic.

Looking ahead, uncertainties about US inflation and China's growth will continue to linger while geopolitical tensions and political transitions could lead to another bumpy year globally. However, we are confident that growth in the ASEAN region is expected to remain strong due to domestic demand, moderating inflation and increased trade and investment flows.

UOB operates from a position of strength in ASEAN. It is an exciting region with much potential to grow. Supply chain diversification, the digital revolution, the massive investments for transition to net zero and a rising middle-class are some of the megatrends driving the dynamism of the region. As a leading ASEAN bank, we are confident that UOB’s strong balance sheet and diversified revenue drivers will enable us to ride on these favourable megatrends to grow with the people and businesses across the region.

UOB is here for the long term. And we stand by our commitment to balancing growth with stability. We expect the operating environment in the next decade to differ vastly from today. The banking industry of the future is likely to see regionalisation of economic flows, new industries emerging due to the sustainability push, artificial intelligence taking service and productivity to a new level, and the rise of regulated digital currencies and tokens.

In 2023, we devised a three-year plan that will help us reach our goal to become the most preferred bank in Southeast Asia. After several years of building product capabilities across our diverse revenue engines, the Bank will now focus on harnessing the capabilities for our next stage of growth.

We will transform ourselves to deliver our ambition by:

UOB’s financial performance remained resilient in 2023. The Group posted a total income of $13.9 billion and a record net profit of $5.7 billion for the financial year ended 31 December 2023. Excluding the one-off costs from integrating Citigroup’s consumer banking businesses in Indonesia, Malaysia, Thailand and Vietnam, core net profit was a record $6.1 billion, up 26 per cent from a year ago.

Net interest income rose 16 per cent to $9.7 billion in 2023 from a year ago with loan growth of two per cent in constant currency. Net fee income grew four per cent to $2.2 billion on the back of higher wealth fees and record credit card fees, which surged 66 per cent to $382 million. This was partly offset by softer loan-related fees amid cautious corporate sentiment. Other non-interest income doubled to $2.0 billion, driven by all-time high customer-related treasury income and strong performance from trading and liquidity management activities.
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Total core operating expenses increased 15 per cent to $5.8 billion. The broad-based expense growth to support strategic initiatives was outpaced by income growth, and cost-to-income ratio improved by 1.8 percentage points to 41.5 per cent.

Total allowance was $921 million due to higher specific allowance on a few non-systemic corporate accounts, and pre-emptive general allowance set aside during the year.

The Group’s asset quality remained stable, with non-performing loan ratio at 1.5 per cent as of 31 December 2023. The non-performing assets coverage stood at 101 per cent or 209 per cent after taking collaterals into account. The Group continues to take a prudent approach to maintaining performing loan coverage at 0.9 per cent.

The Group’s capital position strengthened with Common Equity Tier 1 Capital Adequacy Ratio improving to 13.4 per cent for the fourth quarter. Liquidity remained ample with the average all-currency liquidity coverage ratio at 158 per cent and net stable funding ratio at 120 per cent, both well above regulatory requirements. Loan-to-deposit ratio was healthy at 82.2 per cent.

In 2023, we grew our retail customer base to more than eight million across the region as we completed the acquisition of Citigroup’s consumer banking businesses in four ASEAN markets – Indonesia, Malaysia, Thailand and Vietnam.

In the year, we integrated the new businesses in Malaysia and Indonesia with the UOB platforms, while integration in Thailand is slated for the first half of 2024 and Vietnam will follow suit in 2025. This transformational deal has accelerated UOB’s growth in the region by five years.

The one-off costs for the acquisition will largely taper off in 2024 as we focus on tapping synergies to cross-sell to our expanded customer base.

Despite challenging macroeconomic conditions in 2023, our net credit card fees almost doubled compared with the year before, with a corresponding doubling of total income from the Bank’s unsecured business. Total assets under management rose 11 per cent from 2022, reflecting customers’ confidence and trust in us.

Supported by stronger capabilities and an enlarged scale, we are in a sweet spot to foster strategic partnerships across multiple markets. In 2023, we announced mega lifestyle offerings as the presenting sponsors for the Taylor Swift The Eras Tour in Singapore and the Ed Sheeran +–=÷x Tour in four of our key markets. We will do more to extend lifestyle offerings that meet the needs and aspirations of our customers.

We want to do right by our customers. That includes providing them banking services anytime, anywhere and through any channel they prefer – at our branches, or online, or a combination of both. Today, more than three quarters of our customers are digitally-enabled and one in five use a combination of both physical and digital means to bank with us.

We embarked on building a standardised regional platform two decades ago as part of our vision to build a strong regional bank. This has enabled us to achieve faster speed to market, manage risk more robustly and provide customers with a seamless experience. To strengthen our capabilities, we are investing $500 million to build our latest innovation hub in the Punggol Digital District. Our new facility will be our nerve centre to ideate, develop and pilot the next generation of digital services, including FinTech and sustainable solutions.

As our retail customer base continues to expand, we are ramping up to serve our regional customers. With a unified UOB TMRW in Singapore, Malaysia, Indonesia and Thailand, we now offer unified rewards and digital wealth capabilities to deepen engagement with our customers across these markets.

For our corporate customers, UOB Infinity, our digital banking platform for businesses, is now available in 10 markets across ASEAN and Greater China. We have also enhanced the UOB SME app – launched in Singapore, Malaysia and Vietnam – to enable businesses to stay on top of their operations by facilitating on-the-go transactions.

Through our extensive regional footprint, UOB supports businesses as they expand domestically and across the region. Our unique combination of strong sector expertise and local market knowledge enables us to help businesses navigate market complexities and to seize growth opportunities in ASEAN.

In wholesale banking, we spent $800 million over the past eight years to build capabilities in our regional payments, trade and cash platforms. These platforms are now powering our connectivity business, lifting our cross-border income and transaction banking income. Cross-border income rose nine per cent in 2023 from a year ago, accounting for a quarter of our Group Wholesale Banking income. The transaction banking business expanded significantly, now accounting for more than half of Group Wholesale Banking’s income.

Our multi-year investments have boosted our capacity to grow and will serve us well in the years to come.
We will continue to invest in our franchise as we believe in the long-term structural growth prospects of the region.

UOB supports an orderly and just transition to net zero so that economies continue to grow, and people’s lives and livelihoods continue to improve. We aim to catalyse funding and to support our customers on their transition journey. We are transforming our operating processes and deepening our collaboration with the larger ecosystem of stakeholders, including across all levels of government, economy and society.

As at the end of 2023, UOB had extended $44.5 billion in sustainable financing. The Bank has developed a holistic programme to operationalise our net zero commitment through:

UOB released its first net zero progress report on its commitment to reach net zero by 2050. We made positive headway in meeting the targets set for our five focus sectors in power, automotive, real estate, construction and steel. We achieved reductions in emissions intensities across all five sectors in 2022.  Our commitment also includes no new financing for upstream oil and gas projects approved for development after 2022. Together, the six sectors make up about 60 per cent of our corporate lending portfolio.

We also extended our sustainability efforts to include the community at large. In 2023, we launched the Sustainability Impact Awards jointly with The Business Times to celebrate individuals and businesses who have made significant contributions in this area.

Culture is a key differentiator for UOB. Just like strong roots providing foundation and anchor to a tree, our culture of care, growth and trust helps our UOB family stay grounded and shapes how we grow.

In the past few years, we introduced programmes that cater to our people’s welfare and we will continue to build on that. We believe in growing our own timber and supporting our people to realise their full potential. Building trust in the workplace also continues to be a focus area so that we can empower our people to make a difference in their work.

We introduced The UOB Way to codify our unique culture and belief system among our people in 2022. This is built upon our core values of Honourable, United, Committed and Enterprising. In the year, we extended The UOB Way beyond our people – to include their families and the community.

To give prospective graduates deeper insights into life at UOB, we are partnering all five local polytechnics and three Institute of Technical Education (ITE) colleges to launch the U Unleash Programme. The first partnership of such scale in Singapore, final-year polytechnic and ITE students from hospitality, business and information communications technology schools can do a year-long internship with UOB.

UOB also partnered the Singapore Institute of Management to set up the UOB Better U Campus, a dedicated physical venue to house all UOB’s training and development programmes under one roof. We are also launching SURF, or Supporting Ur Retirement and Future, a transition programme to better prepare employees near retirement age for retirement or re-employment with the Bank.

Our people are our greatest assets. We will continue to invest to create a conducive environment where our people are engaged and energised. This ensures that we have the right culture and talent pool to deliver value to our customers and stakeholders.

UOB believes in doing our part to strengthen social bonds and enrich lives as a catalyst for change. We do this through a variety of ways, including fundraising, volunteering and supporting various social causes related to art, children and education. Through our efforts in various corporate social responsibility initiatives, we aim to keep the good going and to do right by our communities.

Our annual UOB Global Heartbeat Run/Walk event raised more than $2.5 million under the UOB Heartbeat Fund to improve the lives of disadvantaged children and families from 26 charities globally. Since 2007, the programme has raised more than $20 million.

To invest in the future of our youth while challenging them to push the boundaries of possibilities, we supported 500 students from lower-income families in Central Singapore District to learn new digital skills at the third edition of My Digital Bootcamp. A steadfast supporter since the programme’s inception in 2019, UOB has donated $1.5 million across three seasons.

We believe that art is a powerful source of inspiration and connection. Through our 42^nd UOB Painting of the Year (POY) competition, we continue to uncover and nurture talents across the region, while building a thriving ecosystem for regional artists to scale greater heights. The expansion of our flagship annual UOB POY competition to Vietnam reinforces our long-term commitment to supporting visual art in Southeast Asia.

It was with deep sorrow that we bade farewell to the Bank’s Chairman Emeritus and Honorary Adviser, Dr Wee Cho Yaw, in February 2024. As an entrepreneur, business and community leader, Dr Wee had left an indelible mark in Singapore and the region. He had been instrumental in building UOB to be a leading regional bank today. His legacy will live on in the businesses he had built, the values he had demonstrated and the many lives that he had touched.

UOB will not be where we are today without our people’s dedication. I would like to express my appreciation to our people for their commitment and hard work in the past year. Our employees have displayed collaboration and unity to support our customers and one another. I would also like to thank the Board for its wise counsel and support to the UOB management in navigating through the various challenges.

Finally, thank you to our customers and shareholders for your belief in UOB. I look forward to your continued support as we focus our efforts on becoming the most preferred bank for consumers and businesses in ASEAN.