Chairman's Statement

2024 was a year of adapting – global economies had to get used to a new era marked by macroeconomic volatility and elevated uncertainties.

After a period of aggressive interest rate hikes in the last two years, inflationary pressures have somewhat receded, enabling most central banks to ease restrictive monetary policy.

Looking ahead, global growth is expected to soften in 2025. Further escalation of geopolitical events will increase risks to the global outlook. Trade tensions among major economies are expected to push production costs higher, further disrupting global supply chains, investment and trade.

The recent US Administration’s policy announcements pose increased inflation risks with mixed effects on growth, due to the confluence of factors such as prospects of higher trade tariffs, an expansionary fiscal stance and stricter immigration policy. Its economic policies may also weigh down on growth and trade flows globally and in Southeast Asia.

The US tariffs carry a knock-on effect on China, where a continued slowdown in its property market will further tamper China’s trajectory. However, China’s economy would be cushioned to some extent by its government’s stimulus measures.

Despite the global macroeconomic uncertainties, ASEAN’s economies remain steadfastly resilient, supported by a recovery in retail spending from the region’s large and young domestic market. Trade rebounds on electronics across the region also further fuelled growth momentum.

We remain optimistic in the region’s prospects, underpinned by the rebalancing of global trade and supply chain shifts. Total trade flows in ASEAN are projected to accelerate further, reaching US$4.7 trillion by 2027, a 34 per cent increase from US$3.5 trillion in 2023. In the years ahead, foreign direct investment (FDI) inflows into ASEAN are set to rise to US$312 billion by 2027 and further to US$373 billion by 2030, from US$234 billion in 2023.

Amid the ongoing macroeconomic and geopolitical uncertainties, UOB achieved a record net profit of $6.0 billion, up 6 per cent year on year. Given our good performance, the Board recommends a final dividend of 92 cents per ordinary share. Together with the interim dividend of 88 cents per ordinary share, total dividend for the full year will be $1.80 per ordinary share. As part of the Bank’s commitment to managing down excess capital, $2 billion of surplus capital will be used for share buybacks over the coming three years. In addition, a special dividend of 50 cents per ordinary share is recommended with payment over two tranches in 2025, in conjunction with UOB’s 90th anniversary this year.

In 2023, the Board and Management developed a three-year transformation plan to reshape our business and position the Bank for the next stage of growth. We are making steady progress on harnessing our capabilities to support our key growth drivers – connectivity, personalisation and sustainability.

Our investments to enhance digital capabilities for our regional trade, supply chain and cash management platforms are enabling us to drive ASEAN connectivity, boosting our cross-border income and transaction banking income. UOB is the only Bank to have signed Memoranda of Understanding with government investment promotion agencies across our key ASEAN markets to facilitate FDI flows into the region. With our extensive network and strong sector expertise, we are well-placed to help our customers harness cross-border capital flows to tap opportunities across the region.

In 2024, we successfully integrated our Citigroup portfolio in Thailand, following similar exercises in Malaysia and Indonesia in 2023. Integration for Vietnam is on track to be completed by 2025. The full integration of Citigroup’s consumer banking business from these four ASEAN markets is expected to boost the Bank’s annualised revenue by $1 billion. Our cross-sell synergies from the portfolio are delivering strong results and we will continue to intensify our efforts on this. Our enlarged customer base and strengthened regional franchise position us well to be top-of-mind to customers wanting to do business in ASEAN.

The Board is committed to guiding Management to prioritise, formulate and drive the Bank’s sustainability strategy. The Sustainability Advisory Panel set up in 2023 provided strategic counsel to the Bank on opportunities and risks related to nature and biodiversity, as UOB became an early adopter of the Taskforce on Nature-related Financial Disclosures in 2024. We issued our second progress report on our net zero commitment in November 2024. We are progressing across all priority sectors and are trending better than the reference pathways.

Our people are key to the Group’s performance and success. The Board and Management believe in growing our own timber and investing in our people to help them realise their full potential. The Bank is committed to providing upskilling, reskilling and mobility opportunities so that our people can stay ahead of the curve in a rapidly-evolving job market. In October 2024, we launched the Better U Pivot Programme, aimed at helping our employees transition into new roles within the Bank through reskilling and mentorship.

The Board and Management forged ahead with our innovation agenda and focused our attention on artificial intelligence (AI) and Generative AI (GenAI) developments. We supported the Group on key initiatives, including building our own GenAI platform with guardrails, and experimenting with multiple use-cases in areas such as customer experience and technology development.

Managing risk is integral to how we create long-term value for our stakeholders. Amid the global economic uncertainties, we conducted regular stress tests to identify and assess potential vulnerabilities and emerging risks.

As we pursue innovations in AI and GenAI, the Board and Management are mindful of the potential risks these will bring. We will mitigate the risks with additional controls. We will continue to enhance our AI and machine learning governance bodies and frameworks, while guided by regulatory frameworks to ensure the technology is deployed in a responsible manner.

We remain vigilant to money laundering and terrorism financing risks. We continually review and ensure we have robust checks in place, leveraging data analytics and technology solutions.

In 2024, the financial industry continued to face escalating threats from scams and fraud. Guiding the Group to enhance our anti-scam measures remain a central priority for the Board and Management. Under Singapore’s Shared Responsibility Framework, we will continue to strengthen and roll out new real-time fraud surveillance capabilities to better protect the interests of our customers. The fight against scams is a shared responsibility and requires all stakeholders to work together. Our customers remain the singular most effective line of defence against scammers and they must continue to exercise vigilance.

The global geopolitical tensions have the potential to escalate. Notwithstanding these challenges, we are confident that ASEAN will remain a stable region of economic growth and strong trade opportunities. We see ASEAN’s GDP growth remaining stable in 2025.

Over the longer run, the region’s favourable export prospects, rising affluence, cross-border trade coordination and deepening integration in regional industries will pave the way for stronger economic growth. In addition, digital and green economies will drive new investments and create new industries and jobs in the region.

2025 will be a milestone year for UOB as we celebrate our 90th anniversary. Our success over the last nine decades have been anchored by our values of being honourable, enterprising, united and committed, which will continue to guide us beyond this milestone.

On behalf of the Board, I would like to extend my gratitude to the Management and the UOB team for their contributions and service throughout these years. We also thank our shareholders, customers and partners for the trust and support they continue to place in us.