SINGAPORE (Aug 2): IT-related expenses, among other things, have contributed to higher total expenses incurred by United Overseas Bank (UOB) in the 2Q19 and 1H19 ended June 30.
The bank’s total expenses rose 11% y-o-y and 5% q-o-q to $1.13 billion during the quarter, and 10% y-o-y to $2.2 billion during the half-year period.
See: UOB 2Q earnings up 8% to $1.17 bil; declares interim dividend of 55 cents per share
In response to questions, UOB group chief financial officer Lee Wai Fai declined to specify how much of the increase is attributed to the launch of UOB’s digital bank TMRW in Thailand earlier this year.
However, Lee stressed that the increase in total expenses is not solely due to that. He explained that the increase takes into account technology infrastructure upgrades and new hires across all of the bank’s business units.
Nevertheless, he said that much of TMRW’s cost comes from acquisition efforts to onboard new customers, rather than technology-related costs.
“If you understand our push for TMRW, we are open to say that we are not aiming for big numbers in the initial [period]. But [we want] to make sure that we get our acquisition right,” Lee told reporters at the bank’s results briefing on late Friday morning.
Lee said this is important because onboarding more customers does not necessarily translate into more transactions executed.
Meanwhile, UOB deputy chairman and CEO Wee Ee Cheong said that he is glad with the profile of TMRW’s customers thus far.
“We are encouraged by the results so far. The customer onboarded are mainly young professionals and many have started using the platform regularly for transactions,” he said at the same briefing. “We expect to see greater uptake and more activity as we offer more services onto the platform.”
When asked to provide a timeline for TMRW’s entry into a new market, Wee declined to elaborate.
He also declined to specify which market TMRW is targeting to enter into, except to say that it is one with a “big population”.
