United Overseas Bank is taking comfort that its main exposure in Southeast Asia will shield it from the escalating trade war between the U.S. and China.
Unlike local rivals who have expanded their presence in Hong Kong and the mainland, UOB's strategy to stay mostly within Southeast Asia (ASEAN) and expand organically in Mainland China could help insulate it from the current trade tensions.
«ASEAN will become a safe haven,» said UOB's Wee Ee Cheong, who was quoted in the «Business Times» (behind paywall). The bank's 66-year-old chief executive has recently stepped up the bank's efforts in making its presence felt in ASEAN by launching its regionally focused digital bank TMRW.
Distinct Path
Founded by his grandfather in 1935, Wee's bank has taken a distinct path from its larger Singaporean rivals which took over lenders in Hong Kong, seen as a gateway to mainland China.
Back in 2014, Oversea-China Banking Corp, Southeast Asia's second-largest lender, spent about $5 billion buying Hang Seng Bank in Hong Kong after DBS Group Holdings bought Dao Heng Bank in 2001. Both firms are expanding in China's Greater Bay Area that connects Hong Kong to major coastal cities on the mainland.
Preferring Organic Growth
However, UOB is not shunning China entirely. While the bank hopes to sell its 13 percent stake in Hengfeng Bank bought in 2008 someday, it plans to grow its number of branches there. The bank also has wholesale banking operations in Hong Kong and the mainland that capture investment and business flows between Greater China and South-east Asia.
«I would rather grow myself,» he said, pointing to the fact that most of the banking industry in the city is controlled by HSBC Holdings, Standard Chartered, and Chinese banks. «No matter how big you buy, you are just a marginal player,» noted the banking veteran
