UOB boosts pay and signals Asian expansion, despite coronavirus
UOB increased pay by more than its rivals DBS and OCBC did last year, as average annual employee compensation breached the S$100k mark for the first time.
Staff costs per head at UOB – total employee expenditure (such as salaries and bonuses) divided by total headcount – went up by 8% (S$7,507) year-on-year to reach S$101,072 for 2019, according to figures calculated from the bank’s financial results.
That’s well above the 3.8% wage growth that DBS registered over the same period, and is also higher than OCBC’s 6.2% expansion. UOB has traditionally been regarded as the most conservative of Singapore’s three local banks, but recent pay increases have helped it leapfrog OCBC, where average compensation was S$93,139 last year – almost S$8k less than at UOB. DBS remains out in front on S$123,650.
In overall terms, staff costs at UOB went up 11% to S$2,716m year-on-year in 2019 as the bank “prioritised strategic investments in talent”, according to its financial report. Its workforce stood at 26,872 at the end of December, a year-on-year increase of 719 people.
UOB’s results don’t provide details of the extra headcount, but they do repeatedly state that the bank invested in technology in 2019, so it is likely that tech recruits account for a high proportion of the new UOB staff members. About 40% of UOB’s current Singapore-based vacancies are in IT, digital banking, or data and analytics roles, according to UOB’s careers site.
Meanwhile, employees in UOB’s global markets division enjoyed a bountiful 2019. Profit before tax in their unit rose 43% to S$313m from a year ago, mainly from higher trading income.
There was also a “strong” revenue contribution from the wealth management arm of UOB’s retail division (retail profit was up 9% to S$2.01bn in 2019). Net fee and commission income from wealth management increase 18% year-on-year to reach S$641m.
Profit in wholesale banking inched up by just 3% to $3.07bn compared with 2018, but there were “investments in headcount and technology” in the division.
Despite the fact that Southeast Asian economies are reeling from the effects of the coronavirus outbreak, UOB chief executive Wee Ee Cheong said the bank will continue to invest in the region this year. The investment will enable UOB to “emerge stronger from these trying times and to scale up our franchise across the region”, he said. This suggests that UOB will still be hiring in fairly large numbers outside of Singapore.
UOB expects to launch its digital-only product TMRW (which has been operating in Thailand since March 2019) in Indonesia later this year, Wee said, adding that the market opportunity in Asean countries is worth S$10bn, based on the lifetime value of the young professionals that TMRW is targeting in the region. While TMRW operates outside of Singapore, many of the jobs it’s creating are in the city state. In January, UOB hired William Adeney from advertising agency Ogilvy as head of analytics for TMRW.
As we reported earlier this month, UOB has been at the forefront of the Singapore finance sector’s response to tackling the local spread of the coronavirus. It has activated its “business continuity plans for all critical functions and services”, according to a 10 February statement from the firm. Affected UOB staff are working from split sites, from home, and on split shifts, to ensure banking services remain operational and secure.
Photo by Eugenia Clara on Unsplash
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