UOB Malaysia’s PBT Drops 12.9% Following Acquisition of Citigroup’s Consumer Business

37



United Overseas Bank (Malaysia) Bhd (UOB Malaysia) today announced that its one-off cost of acquiring Citigroup’s consumer banking business resulted in a profit before tax (PBT) of RM1.3 billion, a 12.9% decrease compared to the previous year.

“This acquisition was done in a strategic move by the group to strengthen its franchise locally, whilst continuing to invest in technology infrastructure to support future business growth,” its statement read today.

UOB Malaysia CEO Ng Wei Wei added that 2022 was a defining year for the company.

“We completed the acquisition of Citigroup’s consumer banking business in November, and strengthened our retail franchise with an expanded portfolio, touchpoints and partner network,” she said.

The company reported today that following the acquisition of Citigroup’s consumer banking business, UOB Malaysia’s gross loans, advances, and financing grew 17.4% to RM105.7 billion, compared to RM90 billion in 2021.

Meanwhile, its non-bank deposits portfolio had grown by 14.2% to RM110.9 billion from RM97.1 billion a year ago.

The group’s total operating income in 2022 rose 15.2% to RM3.9 billion compared to the previous year.

In its statement to the press, the company said that this growth was predominantly driven by stronger non-interest income and net interest income.

The group’s net interest income increased by 11.3% to RM2.77 billion driven by their proactive balance sheet management, coupled with favourable movements in interest rates through 2022.

As for its non-interest income, UOB Malaysia recorded a 28.3% surge to RM1.1 billion, as the bank continues to leverage on its regional capabilities and network.

The group also reported higher-than-usual operating expenses amounting to RM2.3 billion, marking a 69.7% increase year-on-year (y-o-y), due to the one-off cost of acquiring Citigroup’s consumer banking business.

UOB Malaysia also assured that the bank’s asset quality remains robust, with its total allowance for expected credit losses declining by 70.9% or RM340.7 million on the back of strong post-pandemic economic recovery.

The increase, according to the company, was largely due to the write-back of expected credit losses of non-impaired assets, as well as commitments and contingencies, coupled with lower expected credit loss for impaired assets.

Focused long-term strategy

UOB Malaysia also announced that it has refreshed its brand in September 2022 to sharpen its purpose, “Building the future of Asean”.

The bank outlined three strategy areas – connectivity, personalisation and sustainability – in order to realise this mission.

Apart from that, the company also declared its commitment to reach net-zero emission by 2050, according to its statement.

“In tandem, UOB Malaysia had grown its sustainable finance commitments by more than six times the previous year’s, hitting over RM2 billion at end of 2022,” its statement read.

Ng said that UOB Malaysia will continue to support local businesses’ effort to decarbonise and explore regional expansion via its services.

Source: FMT