UOB outperformed the two other local banks yesterday, coming in as the only bank to register gains for the day. Incidentally, the bank was also the top leader amongst the STI constituents, contributing 5.3 points to the index. While the STI gained 0.1% for the day, UOB rallied 1.9% to close at $20.77 - the highest closing level in 19 months and within a touching distance of the 5 year high of $21.70.

Growth spurt expected in UOB Malaysia’s wealth management
Over the past weekend, the New Straits Times reported that UOB Malaysia is aiming to woo more high net worth clients to the bank’s credit cards. To do so, the bank has plans to launch a new credit card called Lady’s Solitaire, aimed at women earning salaries of more than RM10,000 a month. Managing director and country head of Personal Financial Services, Kevin Lam said that the new card “will cater specifically to the convenience of financially independent women”. He added that the bank “expects its wealth management segment to grow by double-digits with the new product”.

Mobile banking a big hit
In other earlier initiatives, UOB launched UOB Mobile in December 2011 to offer customers a convenient way of banking. A year later, monthly transactions using the app reached a high of 1.1 million in December, an increase of 33% since its launch. According to the Mobile Marketing Association (MMA), Singapore has the highest smart phone penetration in the world. Ms Wendy Teo, Head of Group Channels, UOB, explains that “there is little doubt that Singaporeans’ reliance on their mobile phones has helped to change the way people bank”. Mobile customers are using the app most often to check their account, transfer funds and to make bill payments.

Online shopping opens up possibilities
Besides mobile banking, other channels of banking services have also shown sparks of progression. With the rise of online shopping, more UOB credit card holders are spending money on overseas shipping. According to UOB Cards Data 2012, 20% of Singapore consumers’ total card purchases are made online. Out of which, a third were spent with overseas online retailers. Hence, UOB has launched UOB American Express Virtual Pay, to allow clients to make overseas purchases from sites that do not accept credit cards issued in Singapore.

UOB chief executive Wee Ee Cheong got a 30% pay hike last year, taking home an annual compensation of 8.7mil to 9mil for the year, the Straits Times article stated. The increase was on the back of a record full-year profit of $2.8bil.

Source: Macquarie Research - 04 Apr 2013