* Hsieh Fu Hua to become non-exec chairman in April 2013
* Q2 net profit of S$713 mln beats expectations
* UOB eyes asset management business of ING
By Kevin Lim and Charmian Kok
SINGAPORE, Aug 7 United Overseas Bank,
which on Tuesday capped a strong earnings season for Singapore
banks with a better-than-expected profit rise, said its
long-time chairman is stepping down next year in a surprise
The lender also said it was interested in buying the Asian
asset management businesses belonging to Dutch bank and insurer
ING - which has a portfolio valued at about $54 billion
- if the price was right.
Wee Cho Yaw, who turns 84 next year and whose family
controls UOB, will step down as chairman in April, his son and
UOB Chief Executive Wee Ee Cheong said at an earnings briefing.
The elder Wee became chairman and chief executive of UOB in
1974 but relinquished his CEO position to Wee Ee Cheong in April
2007, according to the bank's latest annual report.
Singapore's third richest man according to Forbes magazine,
had never indicated any retirement plans and had been upset when
reporters raised the subject.
Wee, who will continue to advise the bank in an honorary
role of Chairman Emeritus, oversaw UOB's expansion from a tiny
lender with just one branch in Singapore into a regional giant
with large operations in Singapore, Malaysia, Thailand and
Hsieh Fu Hua, a former CEO of stock exchange operator
Singapore Exchange, will become the non-executive
chairman of Singapore's third-biggest bank, UOB said.
Hsieh is currently a member of UOB's board as well as a
director at state investor Temasek, which controls
rival DBS Group as well as many of the Southeast Asian
city-state's biggest companies such as Singapore Airlines
"It's a natural progression. Hsieh has a lot of experience
from his days at SGX, be it with regulations, governance, or
strategy," said Ng Kian Teck, lead analyst at SIAS Research.
Wee Ee Cheong said the impending change of chairman will not
have any effect on UOB's strategy of regional expansion and
focusing on fee-based income from services such as wealth and
asset management which the bank had embarked on in recent years.
UOB also confirmed interest in assets belonging to ING for
the first time, after a report in May that it was on a short
list of suitors for its Asian asset management businesses. But
CEO Wee said on Tuesday a lot depends on the price.
"As an organisation, our capital is strong so we should take
advantage of that," CEO Wee said.
UOB's core tier one capital is 12.3 percent, well above the
minimum required by the Monetary Authority of Singapore and
higher than most global banks.
"Fund management can provide quite a steady stream of income
for banks," SIAS's analyst Ng said, adding it could be a driver
for profits in a low interest rate environment.
ING is being forced to sell assets in return for receiving
state aid during the global financial crisis.
UOB said second-quarter profit to the end of June rose 12
percent to S$713 million ($574.77 million), beating the S$622
million average estimate of six analysts polled by Thomson
Its results were consistent with rivals DBS Group and
Oversea-Chinese Banking Corp, which last week reported
better-than-expected earnings but warned of pressure on interest
margins amid a regional slowdown.
UOB reported net customer loans growth of 14.3 percent from
a year earlier, while net interest income climbed 7.4 percent
amid growth in higher-margin markets such as Thailand.
Fee and commission income in April to June hit a new
quarterly high of S$386 million, driven by strong loans
processing and corporate finance activities, UOB said.
(Editing by Jon Loades-Carter)