The bank is recommending a final dividend of 39 cents per ordinary share with an option for scrip dividend, bringing the total dividend for FY20 t0 78 cents per ordinary share.

UOB posted earnings of S$2.92 billion ($2.21 billion) for the full year 2020 – 33 percent lower than 2019's record earnings before, citing lower margins and reduced customer activities amid the COVID-19 pandemic, according to financial statements released on Thursday.

At the same time, improving economic and business activity across the region helped boost fourth-quarter earnings to S$688 million – 3 percent better than the previous quarter on higher margins and fee income, as well as lower credit allowances.

Digitalization Payoffs

In particular, UOB cited its growing suite of digital products and services including cash management, treasury and wealth solutions, which helped maintain customer engagement amid the COVID-19 pandemic.

During this period, assets under management from high affluent customers grew 6 percent to S$134 billion, of which around 60 percent was from overseas customers, UOB said.

The group's cross-border income for FY2020 also grew by 1 percent, despite the challenging environment. In addition, operating profit contribution from its overseas operations grew from 41 percent in 2019 to 48 percent, mainly due to the improved performance from its Asean franchise.

Improving Conditions

Going forward, the bank said it would focus on its regional strategy and customer centricity. With net interest margin expected to stay low, UOB said it is rebalancing its business to focus on wealth and connectivity-related products and services that bring more value to customers and drive higher fee income. 

«In the coming 12 to 18 months, macroeconomic conditions are likely to improve, albeit gradually. ASEAN’s connectivity with Greater China and the region’s growing affluence continue to be drivers of growth,» Wee Ee Cheong, UOB’s deputy chairman and CEO, said in the results statement.

Succession Plans

At a media briefing on the results on Thursday, Wee, now 67 and at the helm since 2007, was coy about succession plans at the bank but said it is a work in progress and that he «has many number 2s.»

«For a bank to have long-term sustainability, you cannot depend on one person,» Wee said, adding that the bank has a robust nomination committee and is tracking a younger set of colleagues.