UOB Annual Report 2020 Forging a Sustainable Future United We Stand He Shu About This Report United Overseas Bank Limited (UOB) has been committed to creating long-term value for our customers, our colleagues and our communities since 1935. In building a sustainable business over time and across borders, we engage our stakeholders constructively and regularly. This enables us to align our strategies with what is important to them and for them to have a deeper appreciation of how we contribute to enterprise, innovation and economic growth across the region. Through the reporting of our financial and non-financial performance in the UOB Annual Report 2020, we explain our business approach, objectives and achievements in the context of the year’s operating environment. We also share how we create value for our stakeholders over the short, medium and long term to enable them to make informed decisions. This report covers the period from 1 January to 31 December 2020 and is published on 31 March 2021. It is available online at www.UOBgroup.com/AR2020. Print copies, which are available only on request, are printed on sustainably-sourced Forest Stewardship Council-certified paper. The UOB Sustainability Report 2020 is published separately and is available online. Please scan the QR codes to view: UOB Annual UOB Sustainability Report 2020 Report 2020 All figures in this Annual Report are in Singapore Dollars unless otherwise specified. Certain figures in this report may not add up to the respective totals due to rounding. United We Stand He Shu Chinese ink on rice paper 69 x 91 cm United We Stand, a Highly Commended artwork of the 2020 UOB Painting of the Year (Singapore) competition, Established Artist Category, is the design inspiration for this year’s Annual Report. Ms He Shu’s artwork reflects the strength of the human spirit in overcoming difficulties, especially in the tumultuous year that was beset by the global COVID-19 pandemic. Through the orchids blossoming in the harsh environment, Ms He plants in our minds the power and beauty of solidarity. The butterflies symbolise how the smallest effort can seed the biggest impact. In the words of the artist, “Where there are winds of change, we shall press on with great fortitude to find new waves of transformation. Adapt and learn fast in this changing world, turn anxiety into action, turn waste into energy, turn challenges into opportunities.” Likewise, in 2020, UOB continued to forge ahead sustainably, relying on our time-tested values, strong balance sheet, robust risk management approach and entrepreneurial roots to guide our customers, colleagues and the community through to better times. As the leading patron of art in Asia, UOB sees the value of art in its power to unify, to heal and to open us to possibilities. In its 39th year in 2020, the Bank’s flagship art programme, the UOB Painting of the Year competition, is currently held across four Southeast Asian markets in which UOB has a deep presence. UOB ANNUAL REPORT 2020 1 Contents About Us 4 United Overseas Bank Limited 6 Our Corporate Milestones 8 Our Strategic Purpose 10 Board of Directors 16 Chairman Emeritus and Honorary Adviser 17 Group Management Committee Balancing Growth with Stability for the Long Term 22 Chairman’s Statement 23 Deputy Chairman and CEO’s Report 26 Financial Highlights 31 Investor Highlights Deepening Investor Engagement 36 Award Highlights Being Recognised for Our Efforts Building and Deepening Long-term Relationships 40 Emerging Stronger Together from COVID-19 42 Providing Customers with Seamless Connectivity Across Our Network 52 Innovating Solutions for Customers’ Life Stages and Lifestyles 61 Helping Colleagues Make a Meaningful Difference Governance 72 Corporate Governance 92 Remuneration 96 Risk Management 112 Capital Management 114 Pillar 3 Disclosure Financial Report 117 Financial Statements Additional Information 220 International Network 225 Statistics of Shareholdings 227 Five-Year Ordinary Share Capital Summary Corporate Information 2 UOB ANNUAL REPORT 2020 United Overseas Bank Limited 2020 Financial Highlights Net Profit Operating Profit Gross Customer Loans Customer Deposits $2.9 billion $5.0 billion $281 billion $325 billion -33% -10% +5% +4% Total Assets Non-Performing Net Stable Funding Ratio Common Equity Loan Ratio Tier 1 Ratio $432 billion 125% +7% 1.6% +14% pt 14.7% +0.1% pt +0.4% pt About Us United Overseas Bank Limited 4 UOB ANNUAL REPORT 2020 Who We Are United Overseas Bank Limited (UOB) is a leading bank in Asia At UOB, we believe in being a responsible financial services with a global network of more than 500 branches and offices provider and we are committed to making a difference in the in 19 countries and territories in Asia Pacific, Europe and North communities in which we operate. Just as we are dedicated to America. In Asia, we operate through our head office in Singapore helping our customers manage their finances wisely and grow their and banking subsidiaries in China, Indonesia, Malaysia, Thailand businesses, we are steadfast in our support of social development, and Vietnam, as well as branches and offices across the region. particularly in the areas of art, children and education. In 1935, amid the economic uncertainties following the Great Depression, UOB opened its doors to provide banking services What We Do for the merchant community in Singapore. UOB provides a wide range of progressive financial solutions Since then, UOB has grown organically and through a series of globally through our three core business segments – Group Retail, strategic acquisitions. Today, UOB is rated among the world’s Group Wholesale Banking and Global Markets. Our offering top banks: ‘Aa1’ by Moody’s Investors Service and ‘AA-’ by both includes consumer banking, private banking, commercial banking, S&P Global Ratings and Fitch Ratings. transaction banking, investment banking and treasury services. Through our subsidiaries, we also provide asset management, Over more than eight decades, generations of UOB employees private equity fund management and insurance services. have carried through the entrepreneurial spirit, the focus on long-term value creation and an unwavering commitment to doing what is right for our stakeholders. Where We Operate Asia branches and offices in Brunei 2 Myanmar 2 Asia Pacific, Europe and Hong Kong 3 Philippines 1 >500 North America India 2 Singapore 73 1 Indonesia 176 South Korea 1 3 United Japan 2 Taiwan 2 Canada Kingdom Mainland China 22 Thailand 153 3 USA Malaysia 49 Vietnam 5 1 France 2 Australia UOB ANNUAL REPORT 2020 5 About Us Our Corporate Milestones Since 1935, our entrepreneurial spirit, focus on long-term value creation and unwavering commitment to do what is right for our customers have made UOB a leading bank in Asia. Our timeline captures the corporate milestones of our 85-year history. 1930s – 1960s › 1970s – 1980s › 1990s – 2000s 1971 1992 Acquires majority stake in Chung Khiaw Bank 1st Singapore bank to set up office in Vietnam (CKB) in Singapore Sets up Taipei representative office Opens Tokyo branch 1993 Reveals iconic five-bar logo 1st bank in Singapore to launch automated cash deposit machine Our Beginning 1973 1935 Acquires Lee Wah Bank in Singapore Amid the uncertainties of the Great Depression, 1974 a group of seven businessmen led by Datuk Wee Dr Wee Cho Yaw succeeds Datuk Wee as Kheng Chiang (first row, fifth from left) founded Chairman and CEO a bank to serve the merchant community in Singapore. UOB Group begins operating from its new 30-storey building which stood on the same site 1994 1935 (6 August) as Bonham Building (the current UOB Plaza 2) United Chinese Bank (UCB) is incorporated Expands into Yangon 1995 Celebrates 60th anniversary and official opening of UOB Plaza 1 1935 (1 October) 1975 UCB begins operations at Bonham Building Opens London branch 1977 Opens New York agency 1997 1980 UOB Malaysia merges with CKB Malaysia Opens Singapore’s 1st ATM offering 24-hour banking 1998 Opens Los Angeles agency Opens Shanghai branch 1956 1999 Introduces coin banks for children 1982 Holds inaugural UOB Painting of the Year Acquires Westmont Bank in the Philippines 1958 competition Acquires Radanasin Bank in Thailand st Drives 1 mobile branch 2000 1983 1959 Mr Wee Ee Cheong is appointed Deputy Chairman st Opens Seoul representative office Opens 1 UCB branch at Beach Road 2001 1984 Acquires Overseas Union Bank in Singapore 1962 Opens Beijing representative office st 1 bank to focus on women as customers Acquires majority interest in Far Eastern Bank 2004 in Singapore Acquires 96.1% in Bank of Asia Public Company 1965 in Thailand UCB is renamed United Overseas Bank 1985 2005 Expands into Sydney and Xiamen Increases controlling stake of PT Bank Buana 1986 in Indonesia to 61.1% Expands into Vancouver 2007 1987 Mr Wee Ee Cheong succeeds Dr Wee Cho Yaw Opens 1st overseas branch in Hong Kong Acquires majority interest in Industrial & as CEO Commercial Bank in Singapore Launches st 1988 1 UOB Heartbeat 1st Singapore bank to launch Run/Walk Visa cards 1st bank to launch Singapore’s only credit card for women 6 UOB ANNUAL REPORT 2020 › 2000s – 2010s › 2010s 2020 2009 2017 2020 Opens Mumbai branch 1st in Singapore to use PayNow to raise funds Supports more than 1.4 million individuals for charity and businesses, and contributes more than 2010 $2.7 million for the community under the Merges PT Bank UOB Indonesia with PT Bank 2018 #UnitedForYou COVID-19 Relief Programme UOB Buana 1st Singapore bank to establish a subsidiary in Vietnam Donates