United Overseas Bank (UOB) says it will maintain a measured approach when growing its business amid volatile market conditions. That means the bank will not lunge headlong to acquire new assets without careful consideration, UOB's top figures said yesterday at its annual general meeting . Some 700 shareholders attended the AGM at Pan Pacific Singapore, with all resolutions passed smoothly. But a few had lingering concerns. One shareholder, Mr Paul Tan, asked how UOB plans to expand at a time when its rivals are growing through acquisitions. In response, chairman emeritus Wee Cho Yaw agreed that growth would be limited without acquisitions. "But if you want to make an acquisition, there is a risk that you are also taking. You are taking in both the asset and liability," said the 87-year-old, who led the bank from 1974 to 2007. "Now we have to be very careful. Acquisition is not a simple matter. Even the foreign banks want to sell some of their assets." The verbal exchange reflected the worry of some investors that UOB is being left behind in regional competition as other Singapore banks pursue aggressive growth. UOB has largely stayed on the sidelines over the past two years as OCBC acquired Wing Hang Bank and Barclays' wealth and investment management business in Hong Kong and here. DBS Group Holdings bought Societe Generale's Asian private banking unit in 2014. Despite the caution, acquisition is not a strategy that UOB rules out, said chief executive Wee Ee Cheong. "We are always on a lookout to acquire (assets), but it has to be the right fit, at a right price. Size is not everything. There are many big banks, but they can fail too. We have to pace our growth, and make sure our balance sheet can take it," he said. "It's very easy to grow, just as it's easy to book loans. But can you collect? Having that discipline is the key… Some shareholders actually prefer us to be conservative, to stay disciplined in this volatile world." Shareholders were also assured that UOB will remain resilient despite market headwinds. Last year its net profit dropped 1.2 per cent year-on-year to $3.21 billion. But UOB is facing only a slowdown, not a crisis, Mr Wee stressed. "We do not believe China is headed for a hard landing and South-east Asia is not seeing a repeat of the 1997 financial crisis. Low oil prices have traditionally been a boon for economies and the impact on the banking system and corporates is unlikely to be systemic," he said. UOB shares closed six cents or 0.3 per cent lower at $19.79 yesterday after the AGM.
United Overseas Bank (UOB) has said at its AGM in Singapore it will continue its expansion plans but in a measured way due to the volatile market conditions. However, some shareholders were concerned that UOB is being left behind in regional competition as other Singapore banks pursue a more aggressive expansion strategy. UOB has largely remained on the sidelines over 2014 as OCBC purchased Wing Hang Bank and Barclays' wealth and investment management business in Hong Kong and in Singapore, whilst DBS Group Holdings bought Societe Generale's Asian private banking unit in the past two years. Shareholders were also assured that UOB will continue to remain resilient despite market headwinds.