As a leading financial institution in Asia, we have built strong multi-generational relationships with many of our clients. Our customer-centric service refined over the last eight decades, has enabled us to retain primary bank status with these clients, as well as to continue attracting new clients.

Our Asian heritage and intimate knowledge of the region enable us to offer unique value to our clients across geography, industry and size, including small- and medium-sized enterprises (SMEs), regional and multinational corporations (MNCs), banks and non-bank financial institutions. Our extensive branch network in Southeast Asia and a strategic presence in the rest of Asia enable us to offer seamless, cross-border banking solutions to our clients.

Our dedicated Client Coverage Teams across different client segments work with product specialists in Transaction Banking, Investment Banking and Global Markets to provide a full suite of financial solutions seamlessly. These include working capital and term lending, cash management, trade finance, financial supply chain management, treasury and risk management solutions as well as capital-raising and advisory capabilities.

Our Client Coverage Teams are also aligned along country and industry lines to focus on our clients’ strategic objectives and to meet their specific priorities at each stage of their growth. The performance of these teams is measured by how well they meet the long-term needs of our clients through the full capabilities of our franchise.

Macroeconomic challenges in 2016, including the fall in commodity prices, particularly oil and gas, and muted growth in the US and Europe that affected trade flows in China and Southeast Asia, impacted our clients. They also faced market uncertainty arising from the US presidential election and impending Brexit.

Nevertheless, Group Wholesale Banking’s revenue increased 3.1 per cent in 2016, led by the strong performance of our cash management and Financial Institutions businesses, which saw year-on-year growth of 16 per cent and 23 per cent respectively. This was attributed to continued investments in our Transaction Banking capabilities and in serving our financial institution clients across our network. Operating profit was up by 3.3 per cent, as we remained disciplined in our expense and process management, keeping the increase in expenses to 2.8 per cent during the year. However, the rise in our allowances for credit losses resulted in a year-on-year decline in net profit before tax.

Our Client Coverage Teams stayed focused on expanding our product and service capabilities to offer market-leading solutions that would help our clients increase their business efficiency. Backed by UOB’s unique combination of Asian expertise, on-the-ground coverage, strong balance sheet and credit ratings, we continued to deepen existing client relationships as we increased the breadth of solutions offered to them across our network. This in turn helped us diversify our revenue streams in 2016.

The challenging macroeconomic environment is expected to persist in 2017, as depressed commodity prices, particularly in oil and gas, will continue to have an impact on economic growth rates and companies across Asia. Exports in the region are also likely to be constrained by political uncertainties in the US and Europe, placing pressure on corporate profits. In addition, the increased domestic focus in the US and UK may result in capital flows moving away from Asia, with a resulting impact on new regional business initiatives.

Although the pace of near-term growth may moderate in response to global trends and developments, we remain confident of the fundamental strengths of Asian economies and the long-term growth potential of the region. We anticipate continued expansion of the consumer base in Southeast Asia and Greater China, as well as progress in key regional initiatives such as infrastructure investments, the Belt and Road and the ASEAN Economic Community.

As such, we remain optimistic about the opportunities that these regional initiatives could bring to our clients and our business. Our unique combination of scale and expertise in local markets and regional network capabilities enables us to support the long-term growth aspirations of existing and new clients. To help them seize the business opportunities arising from the region’s growing consumption and multilateral economic initiatives, we will maintain our investments in the areas of domestic and regional cash management, trade finance and financial supply chain management. Our continued strong partnership with Global Markets’ product teams will also enable us to meet the financial needs of our clients and their operations across borders. As we deepen our product capabilities, we will also strengthen our teams in key markets such as Indonesia and Greater China.

Helping Medium-Sized Enterprises Grow Their Businesses Within and Across Borders

Group Commercial Banking teams focus on helping medium-sized enterprises across the UOB network achieve their business goals and objectives by providing them with the full spectrum of Wholesale Banking solutions.

In 2016, we strengthened our capabilities in Greater China, in particular in the Pearl River Delta region and the Yangtze River Economic Belt, as well as in Taiwan, to help our clients seize opportunities. We also expanded our teams in Jakarta and Surabaya to serve the local clients in Indonesia more effectively. In Vietnam, we hosted our first investment and networking forum in Ho Chi Minh City to connect more than 200 clients from across Asia to the business potential and opportunities opening up in the country.

We hosted more than 200 companies from across Asia at an investment seminar in Ho Chi Minh City to share insights into Vietnam’s business potential and opportunities.

Our Foreign Direct Investment (FDI) Advisory Unit is critical to connecting our customers with cross-border opportunities. Through nine FDI Centres located in Singapore, Malaysia, Indonesia, Thailand, China, Hong Kong, Myanmar, Vietnam and India, we work closely with government agencies, trade and industry associations and professional service providers to promote regional connectivity in the areas of trade, finance and logistics.

In 2016, we added another dedicated team to the FDI Advisory Unit in Singapore to help Japanese companies expand into Southeast Asia. We also strengthened our collaboration with our partners in Japan, including the Japan Finance Corporation (JFC), a public organisation that provides financing and business support to Japanese companies. UOB is JFC’s largest Southeast Asian banking partner in its programme aimed at helping Japanese SMEs expand beyond their borders. Within Japan, we also received the approval from Japan’s Foreign Bank Agency Business in 2015 to offer our regional FDI advisory services locally to assist Japanese companies venturing out of the country.

Since it was set up in 2011, the FDI Advisory Unit has engaged and supported more than 1,700 companies from around the world in their expansion into Asia. We have facilitated capital flows of more than $50 billion into the region in the past five years.

To facilitate FDI flows between Southeast Asia and China, in 2016 we signed three Memoranda of Understanding (MOU) with the Financial Affairs Office of the Chongqing Municipal People’s Government, Yubei District Government and the Shanghai Pudong Development Bank’s Chongqing Branch, as well as China Import and Export Bank’s Chongqing Branch. Chongqing, holding the third government-to-government project between Singapore and China, is a gateway city for bilateral trade and investment. As such, the three MOUs pave the way for us to help Chongqing-based companies seize market opportunities in Southeast Asia and vice versa.

In Singapore, we also signed an MOU with International Enterprise (IE) Singapore to assist Singapore companies in their internationalisation efforts. IE Singapore is the government agency that promotes international trade and partners Singapore companies in going global. The MOU was IE Singapore’s first strategic partnership with a Singapore bank, and under which, Singapore companies will gain access to more customised trade and financing solutions, deeper access to in-market connections, business partners and professional service providers across Asia, including business tie-ups with UOB’s global clients. This is in line with IE Singapore’s strategy to build and to strengthen wholesale trade in the country and to provide more support to help Singapore companies overcome financing challenges when they internationalise.

Through our MOU with IE Singapore, we aim to assist Singapore companies in their overseas expansion.

Supporting Economic Development and Entrepreneurship

Through supporting our clients and in encouraging sustainable investments, we contribute to the economic development in the markets in which we operate. In addition to facilitating the construction of gas-fired power plants in Myanmar in 2014, in 2016 we helped finance the building of more than 900 telecommunications towers in the country to meet the rising demand for related services. This also reinforced our commitment to Myanmar and to projects that help meet the country’s growing urbanisation needs.

We also encourage entrepreneurship in Asia through InnoVen Capital, our joint venture with Temasek Holdings. In 2016, InnoVen Capital provided US$5 million in venture debt funding for two startups, namely Malaysia-based KFit Holdings, an e-commerce health and fitness company, and Thailand-based Pomelo Fashion, an e-commerce fashion company. Set up in 2015, InnoVen Capital’s remit is to provide high-growth and innovative Asian startups from sectors such as e-commerce, financial technology, logistics and big data with up to US$500 million in venture debt loans.

In 2016, we also participated in SPRING Singapore’s Venture Debt Programme (VDP) to support local high-growth enterprises in their expansion plans. Under the VDP administered by UOB, SMEs in Singapore, particularly those with innovative business ideas or are operating in nascent sectors, can apply for venture debt loans of up to $5 million each for their working capital or mergers and acquisitions to grow their business. One such company that has benefitted from UOB’s VDP is Conversant Pte Ltd, a provider of digital media enablement services in Asia Pacific, which utilised the funds to further its investments in research and development.

Providing Multi-product Solutions for Large Corporate Clients

Our Client Coverage Teams in Corporate Banking and specialised teams for MNCs and Structured Trade and Commodity Financing serve large corporates headquartered in Asia as well as US and European MNCs operating in the region. We provide them with integrated financial solutions that leverage our regional network capabilities, deep in-market insights and our unique combination of local and regional expertise.

UOB is distinctive in its provision of multi-product solutions to large corporates across the region. These solutions span domestic and cross-border cash management, trade finance, financial supply chain management, treasury and investments in fixed income, currencies and commodities, as well as capital market advisory services.

In 2016, we combined our regional expertise and our product capabilities to provide our private equity clients with leveraged finance solutions to support them in their cross-border mergers and acquisitions of companies in Australia, China, Hong Kong, Malaysia and Vietnam. We also worked with our FDI Advisory Unit to serve clients making forays into new markets such as Myanmar. In addition, we offered cash management solutions to help our clients increase operating efficiencies and maximise their returns on investment. During the year, we also continued to build new client relationships. These include Indonesia’s Mayora Group, to which we provided supply chain financing solutions to help the company meet its working capital requirements and offer its suppliers early payment options.

Despite the continued volatility in commodity prices in 2016, our Structured Trade and Commodity Finance teams continued to deepen client relationships through sustained support of their trade flows across our franchise in Southeast Asia. Although trade volumes declined, we increased our assistance by financing the export of raw materials into China and the export of commodity products out of the country.

To help our clients navigate the prolonged challenges in the macroeconomic environment, our Client Coverage Teams worked closely with Global Markets on customised hedging solutions across commodities and derivatives. This is in line with our increasing focus on serving the needs of companies in target industries across the region, to help them achieve working capital efficiencies and improve their risk management.

We work across teams and geographies to provide our clients with customised financial solutions.

Our continued investments in our regional operating platform, product and service capabilities will enable us to continue providing innovative financial products and services for large corporate clients. These include financial supply chain management solutions catering to large-scale infrastructure projects in Asia that will help our clients weather the subdued economy and manage their working capital and funding gaps.

Partnering Financial Institutions in Their Regional Expansion

Just as we do with our corporate clients, Global Financial Institutions Group harnesses the strengths of our franchise and on-the-ground presence to help our financial institution clients grow their businesses across Asia. These clients include banks, non-bank financial institutions (central banks, diversified financial, public sector, insurers and real money funds) and global property funds and financial sponsors.

We combine our local market knowledge and regional expertise to deliver comprehensive solutions in the areas of cash management, trade financing, interest rate and currency derivatives, hedging, specialised finance structures and capital markets that help drive bottom-line benefits for our clients. This is supported by more than 100 dedicated and sector-specific coverage bankers and analysts across UOB’s global network, backed by product and service expertise drawn from Group Transaction Banking, Group Investment Banking and Global Markets.

In 2016, we continued our strong growth with a 23 per cent rise in revenue year on year, attributed to the expansion of our client portfolio and deepening of our existing partnerships with leading financial institutions expanding across Asia. Since 2015, we have been making targeted investments to expand our coverage of this segment and to sharpen our specialisation to serve the strategic needs of these clients better.

Creating Client Value Through Working Capital, Cash Flow and Liquidity Solutions

Group Transaction Banking works together with the Client Coverage Teams and Global Markets to offer our clients integrated financial solutions spanning cash management, trade finance and financial supply chain management. Such products and services enhance our clients’ ability to meet their domestic and cross-border operating requirements, to optimise cash flows and returns, and to improve the efficiency of their working capital.

For example, we collaborate strategically with FinTech companies to provide comprehensive financial supply chain management solutions for clients with suppliers and distributors based in Asia. These solutions enable our clients to be more effective in their cash flow management as they widen their supplier and distributor base.

The support we extend to our clients includes cross-border liquidity management services and regional virtual account solutions across our key markets. Also available to our clients across the region is UOB BIBPlus, our enhanced electronic banking platform that helps our corporate clients manage their cash and trade transactions more efficiently through the internet or their mobile phones.

Our continued investments in our resources and technology systems reaped results in 2016 as we increased client acquisitions and market share across the region. Although slowing regional trade finance flows affected our portfolio, Transaction Banking’s revenue rose 8.3 per cent during the year, due mainly to the 16 per cent growth in our cash management business. We maintained our contribution of about one-third of Group Wholesale Banking’s total income.

In 2016, we received a total of 26 industry awards from across the region. These include awards for Best Local and Foreign Cash Management Bank across the region at Asiamoney Cash Management Poll; Best Transaction Bank and Best Cash Management Bank in Singapore at The Asian Banker Transaction Banking Awards; as well as Best in Treasury and Working Capital for MNCs/LLCs and SMEs in Singapore and Thailand respectively at The Asset Triple A Treasury, Trade and Risk Management Awards 2016.

Our Group Transaction Banking team at the annual The Asset Triple A Treasury, Trade and Risk Management Awards ceremony.

Our partnership with Singapore Power Group, a government-linked energy utility company, to digitise their end-to-end treasury and payment functions on the SWIFT platform also received the Highly Commended Award for Best SWIFT Solution at Treasury Today Adam Smith Awards Asia.

Offering Corporate Finance Advisory Across Client Segments and Asset Classes

Group Investment Banking originates and structures debt and equity capital market solutions and provides corporate finance advisory services to Group Wholesale Banking clients seeking capital financing. In 2016, our strong product and service capabilities enabled us to lead several landmark event-driven transactions and to maintain our market share on flow products, such as fixed income.

During the year, we remained one of the top mandated lead arrangers for debt capital markets (DCM) syndicated loans in Asia (excluding Japan and Australasia) with 60 transactions across our key markets. We ranked second in Singapore with 26 transactions, and fourth in Southeast Asia.

UOB was one of the Original Mandated Lead Arrangers and Bookrunners for BOC Aviation’s US$1.5 billion syndicated revolving credit facility, which was increased from an initial launch size of US$1.0 billion. We also capitalised on UOB’s regional network and cross-border capabilities to arrange two significant financing transactions for IOI Properties Berhad, namely a S$2.83 billion bridging loan transaction to finance its land purchase in Singapore’s Marina Bay area and a US$400 million term loan facility for its operations in China.

Our DCM Fixed Income team also facilitated more than 70 bond transactions across the region in 2016. UOB continued to reinforce our position as a leading regional player in local currency fixed income, emerging as one of the top four bookrunners in the Singapore dollar bond market and among the top six bookrunners for corporate bond issuances in the Thai baht bond market. We also maintained our standing as a reputable lead manager in the Malaysian ringgit bond market.

In the Singapore dollar bond market, we acted as joint lead manager and bookrunner for the Housing & Development Board’s S$700 million seven-year notes, Starhub Ltd’s S$300 million 10-year notes and Ascendas Pte Ltd’s S$200 million seven-year notes. Amid volatile market conditions, UOB also successfully launched Perennial Real Estate Holdings’ S$280 million four-year retail bond issuance, acting as the joint lead manager, bookrunner and sole underwriter. In addition, we were involved in benchmark Basel III-compliant subordinated Tier 2 capital issuances for foreign financial institutions, such as BPCE SA’s S$130 million 10 non-call five-year bond issuance.

In the Thai baht corporate bond market, we lead-managed more than 50 issuances from several leading Thai bond issuers in various industries, including the THB38.06 billion notes issued by Charoen Pokphand Food Plc. and its subsidiary. We also demonstrated the robustness of our regional collaboration and capabilities of our cross-currency disciplines with KNM Group Berhad’s THB2.78 billion five-year credit enhanced notes – we were the sole lead manager and bookrunner for the Malaysia-domiciled firm’s issuance in the Thai baht bond market, a highly complex deal that involved the fixed income desks in Singapore, Malaysia and Thailand.

Despite the challenges in the oil and gas sector, in Malaysia we executed a sukuk programme of RM650 million for Perdana Petroleum Berhad together with Danajamin Nasional Berhad, a financial guarantee insurer. In Greater China, we continued to tap our regional distribution capabilities to provide debt solutions to corporate and financial institutions clients. Our notable roles include being the sole dealer for China Merchants Holdings (HK)’s HK$320 million 10-year notes, and joint lead manager and bookrunner for Regal Hotels International Holdings’ US$320 million five-year notes.

Our Leveraged Finance team also had a strong year, in particular in the support of our financial sponsor clients. We acted as mandated lead arranger and bookrunner for several landmark leveraged finance transactions, including the acquisition of Interplex Holdings Limited by Baring Private Equity Asia, the acquisition of two businesses from Singapore’s Broadway Industrial Group Limited by Platinum Equity LLC, as well as the acquisition of Australia’s Genesis Care Pty Ltd by a consortium led by China Resources Group.

In addition, UOB continued to be a major player in the mid-cap initial public offering (IPO) market in Singapore with a joint second position by lead-managed deal count in 2016. During the year, our Equity Capital Markets team facilitated the public listings for Secura Group Limited, the largest Catalist IPO fundraising deal in 2016, and for Wong Fong Industries Limited. The team also participated as a joint bookrunner and underwriter for the listing of Frasers Logistics & Industrial Trust, the largest Mainboard listing on the Singapore Exchange for the year.