UOB eyes deals with Chinese firms after Xi's Asean trip
Singaporean bank is keen to help cash-rich state-owned firms looking for investments across different sectors in Southeast Asia
George Chen and Sijia Jiang
United Overseas Bank (UOB), one of Singapore's three biggest banks by assets, is repositioning itself to be the go-to bank for capital-rich state-owned enterprises from mainland China seeking investment opportunities in the Asean region.
Christine Ip, UOB's Hong Kong chief executive, said mainland investors were initially more interested in natural resources deals in member states of the Association of Southeast Asian Nations. However, they were becoming more open to pouring money into other sectors, such as wholesale and retail business, due to high demand for better products from the region's rapidly growing ranks of middle-class consumers.
The mainland is Asean's largest trading partner.
"UOB is already acting as a platform for China-Asean trade. We hope we can further intensify and deepen our relationship with clients," said Ip, formerly chief executive of Australian bank ANZ in China. She also held senior positions at Standard Chartered and HSBC before moving to UOB.
"Being an Asian bank, being ethnically Chinese, we know our clients and we follow our clients everywhere," she said. "That will help us a lot when we expand."
President Xi Jinping visited Asean members Indonesia and Malaysia last week, while Singaporean Prime Minister Lee Hsien Loong visited China in August at the invitation of Premier Li Keqiang.
Analysts say Xi is keen to strengthen political and economic ties between China and the Asean region, where Singapore and Malaysia play leading roles.
Xi's interest in Asean also means investment opportunities for mainland companies, which often go with suggestions by the government, in particular for natural resources reserves to serve the country's national strategy in the long run by keeping its economy growing.
"A lot of the flow of business within the region will definitely help China and Singapore to strengthen their ties and help Asean countries to do more business with China," said Ip, who has 300 staff based in Hong Kong.
"At first, it may be mainly people focusing on natural resources. Now wholesalers and retailing are also coming in with the rising middle class. There is increasing local [Asean] demand. Infrastructure is the basic requirement. So we are also facilitating that."
UOB launched a new foreign direct investment (FDI) advisory unit in Hong Kong last month to serve the growing needs of mainland firms seeking to invest outside the country.
Many mainland state-owned enterprises prefer to set up offices in Hong Kong to serve as their offshore investment platforms, thanks to the city's free capital flow, international legal standards and low-tax environment.
Ip said she wanted to double the bank's FDI business between Hong Kong and Southeast Asia, and mainland firms would be her primary target.
UOB is also aiming to expand its network on the mainland. It currently has offices in nine cities including Beijing, Shanghai and Guangzhou.
"We are looking to expand, but it all depends on regulatory policies. We hope that by 2015, we will be in 12 cities," said Ip, adding that the first of the bank's new offices could be opened in Chongqing.
The bank was also interested in the newly launched Shanghai free-trade zone, she said, but it wanted to wait for the release of detailed rules about how to set up new branches in the zone and what types of business could be offered before deciding how to proceed.
UOB is already a locally incorporated bank on the mainland, with its China headquarters in Shanghai.