UOB Annual Report 2017 I Thought, We Can Stay Strong Like Stones Chok Yue Zan WorldReginfo - 49cb86bb-9f7e-4ef2-8205-de7b06d0672a About This Report Contents United Overseas Bank Limited (UOB) has been committed to Overview creating long-term value for our customers, our colleagues 02 About United Overseas Bank Limited and the community since 1935. In building a sustainable 04 Creating Sustainable Value Across Our Franchise business over time and across markets, we engage our 06 Strategic Priorities stakeholders constructively and regularly. This enables 07 Chairman Emeritus’ Statement us to align our strategies with what is important to them 08 Chairman’s Statement and for them to have a deeper appreciation of how we 09 Deputy Chairman and CEO’s Report contribute to the development of enterprise, innovation 12 Board of Directors and economic growth. 19 Group Management Committee 22 Financial Highlights Through the reporting of our financial and non-financial performance in the UOB Annual Report 2017, we explain our Our Year in Review business approach, aims and achievements in the context of 27 Sustainability Approach the year’s operating environment. Our reporting adopts the 34 Customers tenets of the International Integrated Reporting Council’s • Group Retail Integrated Reporting principles and is in accordance with • Group Wholesale Banking the Global Reporting Initiative’s (GRI) Standards: Core • Global Markets option and selected indicators from GRI’s Financial Services • Investment Management Sector Disclosures paper. 63 Colleagues 74 Community This report can be found online at www.UOBgroup.com/AR2017. 84 Environment More information on UOB is also available at www.UOBgroup.com. 87 Investors Hard copies of this report have been printed on sustainably- 91 Regulators sourced Forest Stewardship Council-certified paper. 93 Stakeholder Engagement 97 Sustainability Scorecard 99 Awards and Accolades Governance 102 Corporate Governance 121 Remuneration 126 Risk Management 139 Capital Management 142 Pillar 3 Disclosure Financial Report 147 Management Discussion and Analysis 159 Financial Statements Investor Reference 260 Statistics of Shareholdings 262 Five-Year Ordinary Share Capital Summary 263 International Network 267 Global Reporting Initiative Content Index 272 Notice of Annual General Meeting 277 Appendix to the Notice of Annual General Meeting Proxy Form Corporate Information All figures in this Annual Report are in Singapore dollars unless otherwise specified. WorldReginfo - 49cb86bb-9f7e-4ef2-8205-de7b06d0672a I Thought, We Can Stay Strong Like Stones by Chok Yue Zan Mixed media 120 x 180 cm Mr Chok Yue Zan’s I Thought, We Can Stay Strong Like Stones is the design inspiration for this Annual Report. Mr Chok reinterprets his family’s portrait to show the depth, strength and unity of familial ties. It received the 2017 UOB Painting of the Year (Malaysia) award. He is also the recipient of the 2018 UOB-Fukuoka Asian Art Museum residency programme. The rocks carved in the shape of the people closest to the artist symbolise the importance of nurturing trusted and deep relationships that last. Standing resilient amid swaying foliage, cloudy skies and rolling waters, the rocks reinforce the need for a firm foundation and fortitude to weather change and volatility. These reflect UOB’s distinctive and disciplined approach to banking. Creating sustainable value for our stakeholders and the communities in which we operate is also expressed through UOB’s support of art. The UOB Painting of the Year Competition, in its 36th year in 2017, is the Bank’s flagship art programme held across four Southeast Asian countries. UOB ANNUAL REPORT 2017 | 1 WorldReginfo - 49cb86bb-9f7e-4ef2-8205-de7b06d0672a 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 and Thailand, 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 and ‘AA-’ by Standard & Poor’s 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 personal financial services, private banking, business banking, commercial and corporate banking, transaction banking, investment banking, corporate finance, capital market activities, treasury services, brokerage and clearing services. Through our subsidiaries, we also provide asset management, venture capital management and insurance services. WorldReginfo - 49cb86bb-9f7e-4ef2-8205-de7b06d0672a Where We Operate branches >500 and offices in Asia Pacific, Europe and North America Myanmar 2 Thailand 154 Vietnam 1 United Kingdom 1 China 22 Canada 3 Hong Kong 3 France 1 USA 3 Taiwan 3 South Korea 2 Japan 2 Philippines 1 India 2 Malaysia 48 Singapore 69 Indonesia 180 Brunei 2 Australia 4 UOB ANNUAL REPORT 2017 | 3 WorldReginfo - 49cb86bb-9f7e-4ef2-8205-de7b06d0672a Creating Sustainable Value Across Our Franchise Guided by our values, we help our customers grow their wealth, manage their businesses and seize opportunities across the region and through economic cycles. Deep relationships and the progress of the economies and communities in which we operate are important to us. We are committed to achieving long-term and stable growth that creates sustainable value for our stakeholders and across our franchise. Our Values Our Fundamental Strengths Honourable Robust Risk Management and We act prudently to fuel Corporate Governance; Strong Credit our customers’ success Ratings, Capital and Funding Base and maintain the highest standards in all we do. Total Liquidity Coverage 147% Ratio (full-year average) Enterprising Established and Integrated Network We possess a forward- looking mindset and provide branches and offices deep insight, taking the >500 across our network initiative to find solutions. United Deep Pool of Talent and Expertise We reach our corporate and individual goals through million invested in cooperation, mutual respect $21.3 training programmes and loyalty. Committed Asian Heritage and Southeast We hold ourselves Asian Roots accountable for ensuring that UOB remains a source of of colleagues in our stability, security and strength. 96% key markets are local 4 | UOB ANNUAL REPORT 2017 WorldReginfo - 49cb86bb-9f7e-4ef2-8205-de7b06d0672a Our Sustainability Pillars Our Customer-focused Business Sustain Group Retail Growth Responsibly Our strong customer relationships are founded on our intimate understanding of who our customers are, what they hold precious and what influences their lives. We focus on their financial present and future. To help them reach their goals, we offer a broad range of products Keep and services that help them plan, save, Customers at spend and invest wisely, in keeping with the Centre their lifestyles and preferences. Develop Group Wholesale Banking Professionals and Global Markets of Principle Our deep client relationships are based on the premise that we care for our clients’ businesses as if they were our own. We offer them the Group’s comprehensive and customised banking and financial risk management services. Through our seamless, cross-border banking solutions Strengthen and on-the-ground coverage, we support Community our clients as they manage and expand Bonds their businesses across Asia. UOB ANNUAL REPORT 2017 | 5 WorldReginfo - 49cb86bb-9f7e-4ef2-8205-de7b06d0672a Strategic Priorities Capitalising on Regional Strengthening Our Enablers to Growth Drivers Sustain Business Growth Fulfilling consumers’ financial needs with the Caring for the growth of our colleagues right solutions in the manner they prefer • Nurturing an innovative and entrepreneurial • Helping our customers safeguard their assets and culture to stay competitive; achieve sustainable yield; • Investing in training and careers for our colleagues • Ensuring our customers benefit from financial to be able and agile to seize the opportunities solutions designed to suit their lifestyles, life stages before them; and aspirations; • Attracting and retaining enterprising minds with • Enabling our customers to grow and to preserve the right values and passion for exceptional their wealth for the next generation; and service; and • Ensuring our products and services are fair, accessible • Developing high-performing and engaged and inclusive. professionals. Facilitating business growth in the region by