Wastescape By Chaichana Luetrakun Acrylic on canvas 180 x 180 cm Wastescape, the winning artwork for the 2019 UOB Painting of the Year (Thailand), Established Artist Category, is the design inspiration for this Annual Report. Mr Chaichana’s artwork is a commentary on how innovation can result in scrap metal and its lasting impact on the environment. It reminds us to consider carefully the consequences of our actions and the legacy we want to leave for future generations. At UOB, our values of Honour, Enterprise, Unity and Commitment guide the decisions we make and actions we take. We believe that for growth to be sustained, it must be balanced with responsibility. This approach enables us to meet the immediate and long-term interests of our stakeholders. By encouraging the appreciation of art in the region, we hope more minds will be open to imagining new realities and to creating new paradigms for the good of all. The UOB Painting of the Year competition, in its 38th year in 2019, is the Bank’s flagship art programme held across four Southeast Asian countries. 1 UOB (THAI) ANNUAL REPORT 2019 Company Profile United Overseas Bank (Thai) Public Company Limited Our Commitment to Fair Dealing (UOB (Thai)) is a fully-licensed commercial bank. With its network of 155 branches and 422 ATMs (as of 31 December 2019), UOB (Thai) Regulatory compliance is a top priority at UOB. We are offers consumer and corporate customers a comprehensive suite committed to upholding the highest standards of ethics, integrity of quality products and services to meet their financial objectives and fairness to our customers and actively promote such and needs. To complement its commercial banking business, awareness in our organization. UOB (Thai) has a subsidiary providing debt collection services. With customers as our focal point, we ensure that fair dealing is UOB (Thai) is rated among the top banks in Thailand by Moody’s entrenched in all aspects of our relationship with the customers. Investors Service and Fitch Ratings: • Fair Dealing is central to our corporate culture. Moody’s Investors Service: International Ratings • Our offering products and services are suitable for our Long-Term Baa1 customers. Short-Term P-2 • We ensure the competency of our sales staff in providing Fitch Ratings: quality advices and appropriate recommendations. International Ratings • We provide the customers with clear, relevant and timely Long-Term A- information, which would enable the customers to make Short-Term F1 informed financial decisions. Viability bbb- Support 1 • We take customer complaints seriously and have robust National Ratings process in place to ensure that the customer complaints are Long-term AAA(tha) managed in a transparent, independent, and efficient manner. Short-term F1+(tha) • Personal data protection and customer privacy are crucial UOB (Thai) is 99.66 per cent owned by Singapore-based to maintaining customers’ trust. We exercise robust controls United Overseas Bank Limited (UOB), which has a global network over access to customer data and monitoring process to of more than 500 offices in Asia Pacific, Europe and North ensure customer’s privacy and confidentiality of customers’ America. data are effectively managed and fully protected. A regional bank rooted in Thailand, UOB (Thai) provides customers with financial expertise and connectivity across Asia. It offers innovative financial solutions, quality products and excellent service through understanding and identifying the needs of its customers. 2 UOB (THAI) ANNUAL REPORT 2019 Financial Highlights Consolidated Financial Statements 2019 2018 Financial Position (Million Baht) Assets 566,167 525,104 Loans 415,456 382,949 Allowance for doubtful accounts 10,563 10,190 Deposits 456,311 405,178 Liabilities 506,152 468,894 Shareholders' equity 60,015 56,209 Capital funds 63,875 60,371 Earnings Performance (Million Baht) Net interest income 14,798 14,370 Non-interest income 5,543 4,935 Net profit before tax 5,644 5,347 Net profit after tax 4,564 4,326 Ratios (%) Net interest income to average assets 2.71 2.76 Return on average assets 0.84 0.83 Return on average equity 7.87 8.00 Earnings per share - basic (Baht) 1.84 1.74 NPLs (gross) to total loans 2.67 2.49 Book value per share (Baht) 24.14 22.61 Common equity tier 1 17.91 16.80 Capital adequacy 20.17 19.23 Other Information Dividend payment (Million Baht) 2,187 1,119 Dividend per share (Baht) 0.88 0.45 3 UOB (THAI) ANNUAL REPORT 2019 Chairman’s Statement Over this time, change has been constant but our commitment to Thailand remains long term. We do what is right for our customers and care for their long-term success. This approach will remain unchanged as we move forward. The Operating Environment customers via our integrated network and through specialised Thailand's economic growth decelerated in 2019 due to lower capabilities such as sector solutions and foreign direct investment demand for exports as a result of the global slowdown and ongoing advisory. During the year, we welcomed trade delegations from trade tensions between the United States and China. Elevated various countries in Asia to Thailand and shared with them market household debt also weighed on domestic consumption while insights to support their business expansion plans. state investment grew at a slower rate. We invested significantly in digital capabilities while balancing On the currency front, the Thai Baht (THB) performed better than growth with stability. In March we launched TMRW, the Group's its Asian peers for a second year in 2019. The strength of the THB Digital Bank for ASEAN’s digital generation. TMRW is transforming, continued even as the domestic economy slowed and despite Bank through the use of data, how Thailand's digital generation engages of Thailand's unexpected rate cut to 1.25 per cent in November with their bank. TMRW was the first bank in Thailand to offer and the introduction of measures to lessen the pressure on the fingerprint and facial biometrics, which was a part of a suite of THB by facilitating more capital outflows to restore the imbalance features that the mobile-only digital bank rolled out to enhance caused by strong capital inflows. the customer experience in new ways beyond the standard digital banking functionalities. 2019 Performance UOB (Thai) continued to deliver steady performance in 2019. Our decades of experience in supporting Small- and Medium-sized We achieved 5.5 per cent growth in net profit after tax to reach Enterprises (SMEs) give us a deep understanding of their needs and Baht 4.6 billion. Total income was Baht 20.3 billion, driven primarily challenges. We complemented our banking services with connections by overall loan growth. Total loans were Baht 415.5 billion, to our ecosystem partners, business advisory and digital solutions a year-on-year increase of 8.5 per cent (Baht 32.5 billion), led by all of which are essential for building sustainable businesses. For the rise in both wholesale and retail loans. The total deposits example, we collaborated with Lazada and Bentoweb to help base was Baht 456.3 billion, an increase of Baht 51.1 billion from Thai online retailers accelerate their business growth through Baht 405.2 billion in 2018. The non-performing loan ratio was at UOB BizMerchant, a bundled solution we launched in 2019 that 2.67 per cent, which continued to be lower than the industry offers faster access to working capital and practical e-commerce average. Despite the uncertainty affecting Thailand economic management tools. growth, we stayed resilient with our strong balance sheet and sustainable financial results. We also provided guidance, resources and mentorship to help SMEs develop and deepen their digital capabilities through our Corporate Developments programme with The FinLab, the bank’s innovation accelerator. We helped the first batch of Thai SMEs from the Smart Business As our customers grow their businesses across Asia, they look Transformation Programme reap positive results from their digital for a banking partner with extensive regional presence and deep transformation. The SMEs piloted digital solutions that helped in-market knowledge to connect them to opportunities opening them to increase business efficiency, to reduce costs, to possess up in the region. With that in mind, we continued to support our 4 UOB (THAI) ANNUAL REPORT 2019 a digital mindset and to facilitate their regional expansion. UOB contributor to Thailand’s economy, its growth will likely be affected (Thai) received a Recognition of Excellence Award 2019 at the this year. The Bank of Thailand has responded by cutting its key Thailand OpenGov Leadership Forum for contributing to the interest rate to a record low of 1.00 per cent in February. country's financial technology and innovation landscape. Thailand's gross domestic product growth is expected to increase Our unwavering focus on doing what is right for our customers for moderately in 2020. Continuing past trends, foreign direct investments the long term continued to receive industry recognition. Among into Thailand will remain a key growth driver. The government's the 26 accolades we received in 2019 was The Asian Banker's Best effort to implement landmark projects in the Eastern Economic Foreign Retail Bank in Thailand for the fifth consecutive year. We Corridor is likely to lift confidence and to fuel investment flows also won three accolades at the Asian Banking and Finance Retail into the country. Banking Awards 2019 for our commitment to designing financial solutions that are essential to customer lifestyles and for building Acknowledgement the Digital Bank of tomorrow. 2019 marks our 20th anniversary. This is another milestone since our founding – a journey which began more than 80 years ago We are committed in our responsibility to contribute to Thailand's by my father.