Chairman’s Statement

The year in review

2015 was marked by tumbling oil prices, sliding Asian markets, sharp depreciation of regional currencies against the US dollar and anxiety over China’s economic slowdown. It is at times such as these that UOB’s innate conservatism plays to its advantage. For in periods of heady growth we are not the first to dash out of the starting blocks in a race for profit. We prefer to maintain a steady footing. This measured approach enables us to stand on firmer ground and to withstand the turbulence that we are facing now.

Given a year of uncertainties, we as a Board are satisfied with our performance. UOB recorded an operating profit of $4.45 billion, up 3.2 per cent over 2014. Net profit after tax held relatively steady at $3.21 billion for 2015.

Harnessing our franchise strength

Through the challenging environment, we enhanced coverage across our regional footprint, investing in specialist bankers particularly for our financial institution clients. We also strengthened product sales across Transaction Banking and Global Markets. Thus we saw strong growth in the Financial Institutions segment along with increased cross-selling in cash management and Global Markets products for our corporate clients. Building on the strengths of our regional franchise, Hong Kong was key to capturing cross-product and cross-geographic opportunities. Its strong growth in 2015 was derived from the expansion of our client base there, as well as from the network activities of our clients from China and Southeast Asia operating in or through Hong Kong.

The year also saw UOB complete its compulsory acquisition of Far Eastern Bank making it a wholly-owned subsidiary of UOB. The acquisition enables UOB to have greater control and management flexibility to integrate the company’s operations for increased efficiencies.

I referred last year to digitisation opening new avenues for financial institutions to meet the needs of consumers. In 2015, we continued to strengthen and to extend the digital experience through our products and services. We also set up The FinLab venture to explore possibilities with FinTech startups through prototypes in payments and collections, wealth management, big data analytics and risk management.

Ensuring our financial resilience

The year ahead will be difficult and so we continue to scour for problems that might arise in time. We have been actively monitoring and stress-testing areas of exposure in China, oil & gas, other commodities and shipping which have been of greatest concern lately. We as a Board have reviewed these vulnerable areas and are satisfied that they are relatively contained.

We have continued to maintain a strong capital position and also enlarged our deposits. We further broadened and diversified our investor and funding base. Last November, we established a US$8 billion Global Covered Bond Programme to provide the Group with access to wholesale funding markets even in periods of extreme market volatility. Our disciplined funding strategy has been central to the Bank’s stable growth.

The next 80

2015 was a year of much significance to UOB for we celebrated UOB’s 80th anniversary and marked our deep commitment to our founding principles of prudence, industry, thrift and vigilance. These principles will continue to guide us and ensure the Group’s continued financial soundness as we protect and promote the interests of our stakeholders.

I am pleased to announce that the Board has recommended a final dividend of 35 cents per ordinary share. Together with the one-off 80th Anniversary dividend of 20 cents and interim dividend of 35 cents, this takes the total dividend for 2015 to 90 cents per ordinary share.

I would like to extend my gratitude to my fellow Board members, and the CEO and his team, for their efforts in steering UOB forward. On behalf of the Board, I thank our colleagues for their dedication in upholding the commitments we make to our customers. And I remain grateful to our customers and shareholders for their continued and loyal support of UOB.

Hsieh Fu Hua

February 2016