Three quarters of UOB Singapore staff now WFH as bank's profit plunges

It’s now become a familiar pattern when Asia-focused banks release their Q1 earnings results: employee issues dominate the first slides of the corporate presentation. So it was with Standard Chartered and DBS last week, and so it is with UOB today.

Across Asia, UOB now has 19,000 staff working from home because of Covid-19 – that’s about 71% of its end-December headcount of 26,872 (UOB did not provide an update on its latest workforce numbers). In Singapore alone – where stringent circuit breaker laws have been in force since April – the figure is more than 75%, said Wee Ee Cheong, UOB deputy chairman and chief executive officer.

UOB did not elaborate on which types of employees are still coming into the office, however they are most likely working in functions including operations and trading. DBS announced on Thursday that remote-working percentages in these two jobs are significantly less than for other roles.

Office-based staff at UOB, including those in branches or operations teams, have staggered working hours and work on split shifts, Dean Tong, head of group human resources, told us last month.

The bank has also boosted benefits such as “family care leave” and flexible work arrangements, according to its results presentation. “We have reduced the daily working hours of our people wherever possible, so that they can attend to their family commitments during these uncertain times,” said Tong in April.

UOB said today (without providing details) that it has launched “educational webinars” for its employees’ “physical and mental wellness”. Other banks in Singapore have similar online programmes in place. UOB has also offered “on-the-job training” to more than 100 new graduates for up to 12 months, with the possibility of conversion to full-time staff at the end of that period.

Meanwhile, first quarter profit at UOB declined 19% year-on-year to S$855m on lower margins and higher credit costs as the bank set aside S$286m in impairment charges. Revenue was stable at S$2.41bn, despite a lower interest rate environment and slowing business momentum towards the end of the quarter due to the effects of the global pandemic.

UOB employees who enjoyed a reasonable opening quarter include those working in wealth management. Within the retail division there was a “strong” Q1 revenue contribution from wealth as income from “high affluent” customers increased 14% year-on-year, while assets under management expanded by 8% to S$124bn.

Global markets did better than other units, with a 33% profit increase to S$110m. But while banks such as Standard Chartered, HSBC and Credit Suisse experienced surging trading income in Q1, UOB said its performance in markets was driven by “higher net interest income, offset by a decline in trading and investment income”.

It wasn’t so good in the wholesale banking division, where operating profit fell 5% from lower loan-related and investment banking fees.

UOB announced last month that it won’t cut jobs during the pandemic, and technology roles at the bank seem particularly secure. CEO Wee said today that the firm’s digital banking services have become “essential tools” as more customers stay home. A third of UOB’s current job vacancies are in technology, and other banks in Singapore continue to hire tech professionals because of rising usage of their digital platforms.

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