Staying resilient and capturing opportunities

COVID-19 has caused severe disruptions to the world for more than two years now. It has changed the way people live, work and connect. Organisations and businesses are also adapting to the “new normal”.

After the sharp recession in 2020, economic activities are gradually recovering towards pre-pandemic levels. With the further opening of economies, the hope is that the recovery will broaden to include more businesses and sectors. However, new COVID-19 variants continue to affect sectors such as tourism, hospitality and aviation.

While COVID-19 has accelerated many global trends, particularly in the area of digital innovation, it has also brought supply chain disruptions, energy price volatility, labour shortages and wage pressures. These translate to higher inflation risks and interest rates, which central bankers, companies and individuals need to manage.

At the same time, geopolitical tensions have worsened. In particular, the US-China rivalry remains tense. Competition between these major powers, which manifested itself over trade, has spilled over into other domains. Escalating tensions between Russia and Ukraine, and the wider European community, is another concern.

At UOB, we continue to monitor all developments closely, ensuring our business remains resilient and responsive to the changing environment. We remain optimistic about Asia’s and ASEAN’s future. ASEAN will continue to generate sustainable long-term growth. In 2021, we achieved a full-year net profit of S$4.1 billion, up 40 per cent as economic activity across the region picked up. With the Monetary of Authority easing the dividend cap, the Board recommends a final dividend of 60 cents per ordinary share. This brings the total dividend for 2021 to $1.20 cents per ordinary share, representing a dividend payout ratio of about 49 per cent.

Pushing ahead on our regional strategy

Our strong balance sheet and prudent business approach are the firm foundation from which we supported our customers, especially small- and medium-sized enterprises (SMEs) that have been among the hardest hit during the pandemic. Our comprehensive and customer-focused pandemic response earned recognition from Euromoney and Global Finance. They both named UOB as the World’s Best Bank for SMEs.

As the Board and Management planned for post-pandemic growth, we worked closely with Management to review and to refresh the Bank’s strategy to ensure investments were directed to capabilities that will propel our future growth, taking into account the risk environment of our markets.

The Board guided Management on various transformation initiatives, taking into consideration changes in customer behaviour, advances in technology, industry disruption, availability of resources and risk management measures. One key initiative was to unify our two industry-leading digital services — UOB Mighty and TMRW — and place them on one platform, UOB TMRW. UOB TMRW enables us to acquire and to serve the huge base of digital-first customers across Southeast Asia. It complements our omni-channel approach, which offers our customers the option of physical touchpoints to serve their more complex financial needs.

We also made significant progress on our sustainability journey, launching more sustainable financing frameworks and programmes to help our retail and business customers. We appointed the Bank’s first Chief Sustainability Officer and established a Corporate Sustainability Office to drive the implementation of policies, programmes and practices that can create a positive environmental and social impact. More details can be found in the UOB Sustainability Report 2021.

In 2021, UOB explored the acquisition of Citigroup’s Southeast Asian consumer banking business. In January 2022, the Bank announced its successful bid for Citigroup’s retail business in Indonesia, Malaysia, Thailand and Vietnam, subject to regulatory approval. The acquisition will enable UOB to achieve our growth targets earlier, double our retail customer base in ASEAN, strengthen our competitiveness and reinforce our position as a leading bank in the region.

UOB has been mindful of the impact the prolonged pandemic has had on our people. We continue to focus on how best to support them and to foster greater engagement, productivity and resilience amid pandemic fatigue. A total wellness approach, comprising physical and mental health and safety, has been paramount. We continue to emphasise life-long learning, talent development and maintaining a pipeline of future leaders.

Board renewal and acknowledgements

We welcomed Mrs Tracey Woon, Mr Dinh Ba Thanh and Ms Teo Lay Lim as independent directors. They join us with a wealth of entrepreneurial experience in the financial services and digital media sector, as well as in areas of business leadership and sustainability.

On behalf of the Board, I thank Messrs James Koh Cher Siang, Ong Yew Huat and Alexander Hungate, who retired or stepped down during the year, for their significant contributions. As Chairman of the Remuneration and Human Capital Committee, Mr Koh was focused on developing a pipeline of future leaders and maintaining a remuneration structure that can attract, retain and motivate talent. Mr Ong’s strong stewardship as Chairman of the Audit Committee ensured effective controls over the Bank’s financial reports and its audit policies and practices. Mr Hungate’s industry expertise helped the Board and Management navigate the competitive challenges and changes over the last few years.

The Board also appreciates the tireless effort of Management and our people to help customers weather the challenges of today and to prepare for the opportunities of tomorrow. The Bank’s 2021 achievements are testament to your commitment, care and enterprising spirit.

We also thank our shareholders, customers, partners and the community for the trust they continue to place in UOB.
Wong Kan Seng
February 2022
Group Management Committee
Deputy Chairman and CEO's Report
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