UOB Annual Report 2019 Balancing Growth with Responsibility Wastescape Chaichana Luetrakun 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 2019, 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 complies with the Singapore Exchange Securities Trading Limited Mainboard Listing Rules 707 to 711 and 1207 on Annual Reports, 711A and 711B on Sustainability Reporting, as well as Practice Note 7.6 Sustainability Reporting Guide issued in June 2016. The embedded Sustainability Report is also in accordance with the Global Reporting Initiative (GRI)’s Standards: Core Option issued in October 2016 by the Global Sustainability Standards Board and selected indicators from the GRI G4 Financial Services Sector Disclosures document. This report covers the period from 1 January to 31 December 2019 and is published on 7 April 2020. It is available online at www.UOBgroup.com/AR2019. Hard copies, which are available only on request, are printed on sustainably-sourced Forest Stewardship Council-certified paper. Please scan the QR code to view the UOB Annual Report 2019. 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. Wastescape 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 ANNUAL REPORT 2019 Contents About Us 4 About United Overseas Bank Limited 6 Our Corporate Milestones 8 Our Strategic Purpose 10 Board of Directors 15 Chairman Emeritus and Honorary Adviser 16 Group Management Committee Balancing Growth with Stability for the Long Term 20 Chairman’s Statement Striking the Right Balance 21 Deputy Chairman and CEO’s Report Generating Long-term Value 24 Financial Highlights Driving Performance 28 Investor Highlights Providing Sustainable Returns 32 Award Highlights Being Recognised for Our Efforts Building and Deepening Long-term Relationships 36 Providing Customers with Seamless Connectivity Across Our Network 44 Creating Solutions Essential to Customers’ Life and Business Stages 53 Helping Our Colleagues Make a Meaningful Difference Shaping a Sustainable Future 62 Sustainability Report 128 GRI Standards Content Index Governance 134 Corporate Governance 151 Remuneration 155 Risk Management 171 Capital Management 173 Pillar 3 Disclosure Financial Report 176 Management Discussion and Analysis 188 Financial Statements Additional Information 282 International Network 286 Statistics of Shareholdings 288 Five-Year Ordinary Share Capital Summary Corporate Information 2 UOB ANNUAL REPORT 2019 Source: UOB Private Bank ‘Envelope’ TV Commercial United Overseas Bank Limited 2019 Financial Highlights Net Profit $4.3 billion +8% Total Income $10.0 billion +10% CET1 Ratio 14.3% +0.4% pt Net Customer Loans $265 billion +3% Customer Deposits $311 billion +6% Total Assets $404 billion +4% 3 UOB ANNUAL REPORT 2019 About United Overseas Bank Limited Who We Are United Overseas Bank Limited (UOB) is a leading bank in Asia with a global network of more than 500 branches and offices in 19 countries and territories in Asia Pacific, Europe and North America. In Asia, we operate through our head office in Singapore and banking subsidiaries in China, Indonesia, Malaysia, Thailand and Vietnam, as well as branches and offices across the region. In 1935, amid the economic uncertainties following the Great Depression, UOB opened its doors to provide banking services for the merchant community in Singapore. Since then, UOB has grown organically and through a series of strategic acquisitions. Today, UOB is rated among the world’s top banks: ‘Aa1’ by Moody’s Investors Service and ‘AA-’ by both S&P Global Ratings and Fitch Ratings. Over more than eight decades, generations of UOB employees 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. At UOB, we believe in being a responsible financial services provider and we are committed to making a difference in the communities in which we operate. Just as we are dedicated to helping our customers manage their finances wisely and grow their businesses, we are steadfast in our support of social development, particularly in the areas of art, children and education. What We Do UOB provides a wide range of financial services globally through our three core business segments – Group Retail, Group Wholesale Banking and Global Markets. Our offering includes consumer banking, private banking, commercial banking, transaction banking, investment banking and treasury services. Through our subsidiaries, we also provide asset management, private equity fund management and insurance services. 4 UOB ANNUAL REPORT 2019 Where We Operate >500 branches and offices in Asia Pacific, Europe and North America Canada 3 United Kingdom 1 France 1 Mainland China 23 Japan 2 USA 3 South Korea 1 Hong Kong 4 Myanmar 2 Taiwan 2 India 2 Philippines 1 Thailand 156 Vietnam 2 Malaysia 48 Brunei 2 Singapore 72 Indonesia 183 Australia 3 5 UOB ANNUAL REPORT 2019 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 84-year history. 1930s › 1970s - 1980s › 1980s - 1990s 1971 1985 Acquires majority stake in Chung Khiaw Bank Expands into Sydney and Xiamen (CKB) 1986 Opens Tokyo Branch Expands into Vancouver Reveals iconic five-bar logo 1987 Acquires majority interest in Industrial & Our Beginning Commercial Bank 1935 Amid the uncertainties of the Great Depression, 1988 st a group of seven businessmen led by Datuk Wee 1973 1 Singapore bank to launch Visa cards Kheng Chiang (first row, fifth from left) founded Acquires Lee Wah Bank 1st bank to launch Singapore’s only credit card a bank to serve the merchant community in for ladies Singapore. 1974 Dr Wee Cho Yaw succeeds Datuk Wee as 1935 (6 August) Chairman and CEO United Chinese Bank (UCB) is incorporated UOB Group begins operating from its new 30-storey building which stood on the same site as Bonham building (the current UOB Plaza 2) 1992 1st Singapore bank to set up office in Vietnam 1935 (1 October) Sets up Taipei representative office UCB begins operations at Bonham building 1993 1975 1st bank in Singapore to launch automated Opens London branch Cash Deposit Machine 1977 Opens New York agency 1980 Opens Singapore’s 1st ATM offering 24-hour banking Opens Los Angeles agency 1994 1956 1982 Expands into Yangon Introduces coin banks for children Holds inaugural UOB Painting of the Year competition 1995 1958 Celebrates 60th anniversary and official Drives 1st mobile branch opening of UOB Plaza 1 1959 Opens 1st UCB branch at Beach Road 1962 1st bank to focus on women as customers 1965 UCB is renamed United Overseas Bank 1983 Opens Seoul representative office 1997 UOB Malaysia merges with CKB Malaysia 1984 Opens Beijing representative office 1998 Acquires majority interest in Far Eastern Bank Opens Shanghai branch st Opens 1 overseas branch in Hong Kong 1999 Acquires Westmont Bank in the Philippines Acquires Radanasin Bank in Thailand 6 UOB ANNUAL REPORT 2019 › 2000s - 2010s › 2010s 2019 2000 2015 2018 Mr Wee Ee Cheong is appointed Deputy Chairman Celebrates 80th anniversary, introduces 1st Singapore bank to establish a subsidiary refreshed logo and a corporate seal in Vietnam 2001 Acquires Overseas Union Bank 2004 Acquires 96.1% in Bank of Asia Public Company in Thailand 2005 Increases controlling stake of PT Bank Buana Officially opens new China headquarters in Indonesia to 61.1% building in Shanghai’s Lujiazui Financial District 2007 Mr Wee Ee Cheong succeeds Dr Wee Cho Yaw as CEO Opens Yangon branch Launches 1st UOB Heartbeat Run/Walk Sets up Singapore’s largest