Singapore: UOB sells Brunei retail banking business to Baiduri Bank for $46.6m

Visual from the UOB website. October 2015

The Brunei unit of United Overseas Bank (UOB) has offloaded its retail banking business to Baiduri Bank Berhad for BND65 million ($46.6 million).

With the approval of a court declaration, banking and credit facilities made to customers of UOB Brunei and the current, saving and fixed deposit accounts maintained by the clients of UOB Brunei will be transferred to Baiduri.

According to UOB, the sale consideration of $46.6 million, less the deposits in transferred accounts, will be settled as a cash payment. Arrived at on a willing-buyer-willing-seller basis, it took into consideration account income potential and estimated loan defaults of the retail banking business.

The sale is part of a move to “rationalise its businesses and operations to achieve cost efficiencies and to focus on building a business platform that is consistent with the business prospects in the country”.

According to official statements, the sale of its Brunei retail banking unit is also not expected to have any impact on UOB Group for FY2015.

UOB Brunei will continue to offer wholesale banking services to Brunei clients, as well as continuing its asset management presence there through UOB Asset Management.

Also Read: UOB-Temasek tie-up to provide $500m venture debt financing in China, India

This latest move gels with UOB’s aim of developing itself as a super-regional bank and growing its presence in the Asia Pacific (APAC) region, given the opportunities presented by the growth narrative defining the current economic climate of the region – notwithstanding China’s market turbulence – and the growing middle class of the region.

In August 2014, Wee Ee Cheong, the CEO of UOB, explained to The Straits Times that due to the acquisition of Overseas Union Bank (OUB) in 2001 and its integration into the UOB Group, the large market concentration in Singapore forced them to take a regional growth approach. Wee had told the Straits Times: “How would the group grow from there? And so we said it would be timely for us to expand regionally to have an effective presence in South-east Asia.”

Wee explained: “…growing our intra-regional businesses would make our earnings more sustainable and deepen existing relationships. If I have a regional banking relationship with my customer and the banks with me in Indonesia and Thailand because of my footprint, it will be easier for us to grow the banking relationship.”

Since 2013, its profit growth has become skewed to foreign markets beyond its base and global headquarters in Singapore. The divestment reflects a move to consolidate its holdings in the region, as Brunei is the smallest market in the Southeast Asian region. This move is aligned with its decision to pursue organic growth and M&A opportunities as part of expanding its business operations.

In June 2015, it disclosed that it was in the process of pursuing a digital revamp, given the recent growth of the worldwide financial technology space. As of 21 October 2015, a Bloomberg quote placed its market capitalisation at S$32.03 billion (US$23 billion).

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.