UOB Malaysia has reported a record-breaking financial performance for the fiscal year ending 2023, with total operating income reaching RM4.6 billion and net profit before tax (NPBT) surging to RM1.9 billion. This marks a significant increase from the previous year, reflecting the bank’s strong growth and strategic initiatives.
According to UOB Malaysia’s Annual Report 2023, published on 9 May 2024, the bank’s operating income grew by 19.3% from RM3.9 billion in 2022, surpassing the RM4.0 billion mark for the first time. NPBT saw an even more impressive increase of 44.4%, rising from RM1.3 billion in the previous year.
The growth in operating income was driven by several factors, including a 7.4% increase in net interest income to RM2.9 billion and a 14.8% rise in income from Islamic Banking, totaling RM169.6 million. Additionally, other operating income grew by 50.0% to RM1.6 billion, primarily due to higher net foreign exchange gains and increased fee and commission income.
UOB Malaysia’s performance across its business pillars was notable, with Wholesale Banking operating income increasing by 18.5% to RM2.1 billion. This growth was supported by strong performance in Transaction Banking and Global Markets’ business flows. The bank has continued to leverage its extensive ASEAN footprint and connectivity with Greater China to assist businesses in expanding their operations.
Since 2013, UOB Malaysia has facilitated investments in the country by over 500 global companies and supported the regional expansion of more than 230 Malaysian companies. Demonstrating its commitment to sustainable practices, the bank has provided RM6.2 billion in green financing loans, positioning itself as a leader in sustainability financing with comprehensive solutions validated by international standards.
Retail Banking also saw significant growth, with operating income rising by 46.1% to RM1.9 billion. This was largely due to a notable increase in net interest income and fee and commission income, partly resulting from the integration of Citigroup’s Consumer Banking business. UOB Malaysia was the first of the four regional markets to complete this integration in July 2023.
Ms. Ng Wei Wei, Chief Executive Officer of UOB Malaysia, expressed satisfaction with the bank’s performance, stating, “We are pleased to announce our record financial performance, driven by our key business pillars’ strong results and disciplined cost management. Guided by our three-year strategic plan, UOB Malaysia will continue to leverage our extensive footprint and expertise to help businesses unlock new avenues for growth across the region through cross-border trade and investment. As sustainability increasingly becomes a business imperative, we are committed to supporting local companies, especially the SMEs, transition to green practices and increase their competitiveness in the global value chain.”
Ms. Ng also highlighted the benefits of the Citigroup acquisition, noting, “The acquisition of Citigroup’s Consumer Banking business has further strengthened UOB Malaysia’s retail franchise and unlocked new opportunities for better product offerings and global partnerships. With the successful integration in July 2023, the Bank will continue to extract value from the synergy of the two portfolios to drive growth.”
Despite a 3.6% increase in operating expenses, mainly due to a one-off cost from the Citigroup acquisition, UOB Malaysia maintained disciplined cost management. The bank’s total allowance for expected credit losses rose by RM191.4 million to RM331.4 million, largely due to higher expected credit losses of non-impaired assets and increased provisions for impaired assets.
In 2023, UOB Malaysia’s gross loans, advances, and financing grew by 1.4% to RM107.1 billion, with an 11.0% increase in trade financing. Non-bank deposits increased by 4.6% to RM116.0 billion. The bank’s capital position remained robust, with a Common Equity Tier 1 ratio of 15.9% and a Capital Adequacy Ratio of 18.9%, well above regulatory requirements, providing a solid foundation for future growth.