UOB Malaysia recorded RM3.9 billion in its total operating income in 2022, a 15.2% increase from the year before. The growth was predominantly driven by stronger non-interest income and net interest income.
Net interest income increased by 11.3% to RM2.7 billion due to UOB Malaysia’s proactive balance sheet management, coupled with the favourable movements in interest rates throughout 2022. Meanwhile, non-interest income surged by 28.3% to RM1.1 billion, as the Bank continues to leverage of its regional capabilities and network.
UOB Malaysia reported a higher-than-usual operating expenses of RM2.3 billion (an increase of 69.7% year-on-year), largely attributed to the one-off cost of acquiring Citigroup’s consumer banking business in the country. The acquisition was done in a strategic move by UOB to strengthen its franchise in Malaysia. At the same time, the Bank continued to invest in technology infrastructure to support future business growth. As a result, the Bank reported a profit before tax of RM1.3 billion, 12.9% lower than previous year.
Expanding retail lending portfolio while maintaining good asset quality
Combined with the retail franchise from Citi consumer banking business, UOB Malaysia’s gross loans, advances, and financing, as well as non-bank deposits portfolios grew significantly to RM105.7 billion (2021: RM90.0 billion) and RM110.9 billion (2021: RM97.1 billion) respectively.
The Bank’s asset quality remained robust. With the strong post pandemic economic recovery, total allowance for expected credit losses declined by 70.9% or RM340.7 million. This was largely attributable to the write-back of expected credit losses of non-impaired assets, as well as commitments and contingencies, coupled with lower expected credit loss for impaired assets.
Ng Wei Wei, Chief Executive Officer, UOB Malaysia said, “2022 was a defining year for UOB Malaysia. We completed the acquisition of Citi consumer banking business in November, and strengthened our retail franchise with an expanded portfolio, touchpoints and partner network. Guided by our three-year growth strategy, we also continued to transform and scale up our infrastructure, digital capabilities, network, people, and brand. UOB has grown alongside Malaysia for over 70 years and we remain confident of the country’s long term growth potential, as reflected by our continued investment including our new state-of-the-art and green headquarters, UOB Plaza 1 KL.”
Recently, UOB Malaysia was ranked top 2 bank in Malaysia by Forbes’ World’s Best Banks 2023. The recognition was based on an independent survey conducted with customers to evaluate banks on their customers’ overall satisfaction, inclination to recommend the bank, and the Banks’ ratings in five key areas: trust, terms and conditions, digital services, customer service, and financial advice. Each bank had to be rated by at least 250 customers in order to qualify for the list.
According to Ng, “The ranking is particularly meaningful as the survey was independent and represented the voices of our customers. We are indeed proud and grateful for our customers’ encouraging acknowledgement which will spur us on to continue to innovate and create value for them.”
Long-term strategy and commitment backed by a sharpened purpose
Affirming the Bank’s long-term strategy and commitment to the country, UOB Malaysia refreshed its brand in September 2022 aligned with a sharpened purpose – Building the future of ASEAN: For the people and businesses within, and connecting with, ASEAN. To carry out its sharpened purpose, the Bank doubled down on its focus on three strategic areas – Connectivity, Personalisation, and Sustainability.
During the year, the Bank also announced its commitment to reach net zero by 2050, after having achieved carbon neutrality regionally. In tandem, UOB Malaysia grew its sustainable finance commitments by more than six times the previous year’s, hitting over RM2.0 billion as at end of 2022.
UOB Malaysia is also focused on supporting small and medium enterprises (SMEs) on their sustainable journey through partnerships with ecosystem partners including Syarikat Jaminan Pembiayaan Perniagaan Malaysia (SJPP) to launch the U-Green Financing programme. To this end, the Bank has allocated RM1 billion for this programme, of which up to 80% of the loans are guaranteed by SJPP under the government’s PEMULIH Government Guarantee Scheme.
Additionally, the Bank’s new headquarters, UOB Plaza 1 KL, is a green building that incorporates elements of wellness and sustainability in its design. It has been earmarked to receive platinum certifications from BCA Greenmark and GreenRE.
Ng said, “UOB Malaysia will continue to support local businesses to decarbonise by leveraging our sustainable finance frameworks, and to explore regional expansion including capitalising on the growing cross-border trade opportunities. In 2022, we launched two digital solutions for businesses, UOB Infinity and the UOB SME app, which are equipped with supply chain management capabilities. We will continue to invest in our supply chain management platform to drive foreign direct investment (FDI) and trade, in line with our aspiration to be the top cross-border bank in ASEAN.”
In addition to trade, UOB has facilitated over 420 global companies in their expansion into Malaysia and assisted more than 200 Malaysian companies with their regional expansion. The Bank is the first in Southeast Asia to set up a dedicated FDI Advisory team across 10 dedicated FDI centres across Asia, including Malaysia in 2013. UOB aims to be the One Bank for ASEAN and is committed to play a more meaningful role in facilitating Malaysia’s growth and helping local businesses prosper through regional expansion.
UOB Malaysia’s Annual Report 2022 is available at uob.my/stakeholders/annual/annual.page.