SINGAPORE (Mar 15): United Overseas Bank is targeting 3-5 million digital customers in five markets over the next five years.
UOB is committed to maintaining dividend payout ratio at 50% if CET-1 CAR stays above 13% and it achieves RORWA (return on risk-weighted assets) of 1.60-1.65%.
Meanwhile, the bank says will stay disciplined in pursuing sustainable growth as global uncertainties persist and maintain a risk-focused approach while equipping its staff for the future.
In an unrated report published on Friday, UOB says management has guided for mid-single-digit loan growth in 2019 as mortgages are expected to grow at low- to mid- single-digit and building & construction loans should moderate due to the slowdown in en-bloc transactions.
While private residential properties sold directly by developers have dropped 39% q-o-q to 1,836 units in 4Q18 as demand was curtailed by the cooling measures imposed in July 2018, demand has since stabilised, driven by first-time home buyers for owner occupation, says management.
In addition, UOB’s NIM (net interest margin) is expected to be maintained at about 1.82bp but should benefit from hikes in mortgage rates in 1Q19. Currently, new mortgages are priced at 2.4% for two-year fixed rate packages and 2.3% for floating rate packages, compared to below 2% for 2018.
Fees should also grow by mid-single-digits. Management expects CIR (cost and income ratio) to be stable at 44% and credit cost at 20-25bp. UOB targets to achieve ROE of 12% for 2019.
UOB will soon launch TMRW its mobile-only digital bank for millennials, in Thailand. UOB is also leveraging on fintech partnerships with Personetics and Meniga to learn in real time how to deepen customer engagement.
Meanwhile, UOB has renewed its strategic regional bancassurance partnership with Prudential for another 15 years. It will distribute Prudential’s life insurance products to its consumer banking customer base in Singapore, Malaysia, Thailand, Indonesia and Vietnam.
As at 12.32pm, shares in UOB are up 16 cents at $25.21.
