UOB has injected 2 billion yuan (US$317.71 million) into its subsidiary UOB China, which plans to funnel the increased capital into three key areas – connectivity, progressive solutions and sustainability.
Connectivity-wise, it will expand client relations in sectors that are strong drivers of China’s economy as well as continue to deepen relationships with existing anchor clients and along their value chain. It will also strengthen its strategic partnership with Hengfeng Bank by jointly tapping cross-border business potential.
On the back of China’s financial liberalization, the bank will continue to develop progressive financial solutions to meet clients’ cross-border needs. UOB China plans to enhance its position on Asean currency/RMB market-making and hedging services to help more clients manage their foreign risk exposures. With more capital, the bank also aims to provide clients with more solutions on commodities hedging and rates.
And UOB China will continue to push forward its sustainability strategy to help customers advance responsibly by supporting key sectors that align with China’s carbon emission reduction action plan in areas like renewable energy, energy saving projects and industrial upgrades, as well as sectors involved in the circular economy. In 2021, UOB China recorded double-digit year-on-year growth in the number of clients taking up its green financing solutions, which were extended to clients to facilitate their projects in electrical vehicles, real estate, solar panels and plastic recycling.
“The capital injection is a strong testament to our commitment to China and firm confidence in the country’s growing economy,” says Wee Ee Cheong, deputy chairman and chief executive officer of UOB and chairman of UOB China. “With enhanced intra-regional connectivity, coupled with increased cross-border trade and investments, we are investing in our capabilities to support closer connectivity between China and Asean [the Association of Southeast Asian Nations]. We will strengthen our support to our clients as they take advantage of the opportunities arising from regional connectivity initiatives, such as the newly-enforced Regional Comprehensive Economic Partnership.”
This is the parent bank’s second capital injection into UOB China, following the increase in its registered capital from 3 billion to 5.5 billion yuan in 2015. Since its incorporation in 2008, UOB China has maintained robust compound annual revenue growth of 13%. Its net profit before tax hit a record high in 2021, more than double that in 2018.