SINGAPORE - Shares of UOB fell by around 1 per cent when they commenced trading on Feb 5, two days after the bank’s former chairman and chief executive Wee Cho Yaw died, but rebounded slightly during the day to close at $28.39, down just 0.8 per cent.
Mr Wee, who helmed the bank for over 60 years before retiring as chairman in 2013 and board director in 2018, died on Feb 3 at the age of 95, according to a statement by the bank.
He was dubbed a “titan of Singapore’s banking industry” by Prime Minister Lee Hsien Loong in a tribute to the late banker.
Under his leadership, Singapore’s third-largest bank saw its assets increase from $2.8 billion to more than $253 billion, growing from 75 branches and offices to more than 500 globally.
Apart from the stable share price, trading in UOB’s shares was also higher than usual, with over 2.18 million shares changing hands for the day, according to data from the Singapore Exchange.
On Moomoo Singapore’s online trading platform, the total volume and monetary value of UOB shares traded doubled on Feb 5 relative to the average last week, with 5.8 times more buy than sell transactions, according to data provided by the online brokerage. It declined to disclose the specific number of shares traded, saying the information is private.
Maybank Securities’ head of research for Singapore Thilan Wickramasinghe told The Straits Times: “Mr Wee Cho Yaw’s contribution to Singapore’s banking sector is immense. Part of that contribution was to build a deep management bench and clear succession at UOB. This should ensure that the group’s strategy and execution remain on track going forward.”
UOB has been helmed by the late Mr Wee’s son, current CEO Wee Ee Cheong, since 2007.
Among the biggest decisions the younger Mr Wee has made and directly supervised is the nearly $5 billion acquisition of United States bank Citi’s retail portfolio in Indonesia, Malaysia, Thailand and Vietnam, in a move that has helped accelerate UOB’s growth targets by five years, the younger Wee said when the deal was first announced in January 2022.
UOB is now also the biggest foreign bank in Malaysia, following the acquisition.
The Citi decision came after UOB in September 2021 said it would also invest up to $500 million over the next five years to scale up its digital offerings in Singapore and the rest of Asean, with the aim of doubling the retail customers it serves digitally to more than seven million.
The bank reported net profit of $1.38 billion for the third quarter ended September 2023, which was down 1 per cent from the same quarter in the 2022 financial year owing to one-off expenses related to the Citi acquisition.
It will report its results for the fourth quarter of 2023 on Feb 22, when it is expected to announce a dividend of 86 cents for the period, bringing total dividends paid to $1.72 for the year, according to RHB Invest. That works out to a dividend yield of around 6.2 per cent, which is comparable with that of DBS Bank and OCBC Bank.
During UOB’s third-quarter results briefing, Mr Wee said he expects the one-off Citi integration costs to “substantially roll off” to result in a stable cost-to-income ratio in 2024.
He also anticipates that the bank will achieve mid-single-digit loan growth, as well as double-digit fee growth in 2024.
