UOB Chief Dismisses AI Forecast as 'Too Conservative'

When asked to predict the future market capitalisation of United Overseas Bank (UOB) a decade from now, artificial intelligence crunched the numbers and spat out a figure between US$66 billion and US$73 billion (S$90bn–S$100bn). For most, nearly doubling the bank’s current valuation of roughly US$42 billion would be a triumph. For UOB’s Chief Executive Officer, Mr Wee Ee Cheong, it was simply "too conservative".

As the Singaporean lender approaches its centenary in 2035, the third-generation leader is looking beyond algorithmic projections. In a landscape defined by shifting supply chains and geopolitical friction, Mr Wee believes the true alpha lies in the burgeoning potential of Southeast Asia—a variable the AI failed to fully price in.

While UOB currently commands a significant slice of the domestic market—holding roughly 25 per cent of Singapore-dollar loans—the bank’s strategic compass is pointed firmly towards the broader ASEAN region. The objective is clear: lift the revenue contribution from Southeast Asian markets (excluding Singapore) to 30 per cent by 2026.

Mr Wee identifies the region as an economic "sweet spot". As global multinationals diversify their supply chains away from single-source dependencies, Southeast Asia has become a primary beneficiary of these capital flows. Malaysia, in particular, stands out as a critical growth engine. With UOB already positioned as the largest foreign bank across the Causeway, the lender is aggressively targeting the Johor-Singapore Special Economic Zone (JS-SEZ).

However, this integration is not without its caveats. Mr Wee noted that while cross-border spending is a boon for consumers, it risks hollowing out Singapore’s retail sector if the economic gravity shifts too rapidly towards Johor.

Despite the bullish long-term thesis, the immediate rear-view mirror shows some turbulence. In November, the bank reported a sharp 72 per cent year-on-year decline in third-quarter earnings, dropping to approximately US$295 million. This figure, which missed market expectations, was dragged down by a pre-emptive provision of nearly US$440 million to cover potential defaults in the commercial real estate sectors of the US and Greater China.

For equity investors, the spike in non-performing loans—particularly the 13 per cent quarterly rise in Greater China—raised eyebrows. Yet, Mr Wee remains unfazed by the cyclical downturn. "The storm will pass," he remarked, emphasising that UOB’s capital buffers remain robust. He views the current dip as a necessary calibration, noting that even with reduced earnings, the bank’s underlying profitability and recent acquisition of Citigroup’s consumer assets in four ASEAN markets provide a sturdy foundation for recovery.

Looking beyond the balance sheet, Mr Wee offered a glimpse into his management philosophy, likening corporate renewal to the cultivation of a bonsai tree. Just as a bonsai must be uprooted and trimmed to prevent overcrowding and ensure longevity, a bank must periodically refresh its leadership and structure.

With succession planning a hot topic following leadership changes at rival banks DBS and OCBC, Mr Wee stressed that the next generation of UOB leaders is being groomed internally with a five-to-ten-year horizon. He prioritises "cultural familiarity"—quipping that "we use chopsticks"—as a competitive moat that foreign banks cannot easily replicate. For investors, this signals that while UOB is modernising its tech stack and embracing AI, its governance style will remain rooted in steady, prudent stewardship rather than radical disruption.