A year ago, when I asked my mum what she was going to do with her retirement funds, she told me she had put it with UOB, into their Fixed Deposits.
That was when I knew that UOB was still leading the retail market, after so many years.
With all the furore over the soaring share prices of banks in recent months, you might be hard-pressed to find which exact bank to buy in Singapore.
Whilst I have both the OCBC and DBS Banks, UOB was the latest, and biggest position I added.
Why?
But more importantly, what can we learn from its approach to business, that might bode well for you, as a long-term investor?
It’s focused on consumers, and reducing their frustration
I recently had to make a call to Standard Chartered Bank because they had tied the wrong number to my Internet banking. This meant that I couldn’t get the OTP.
But I was on the phone 3 times, and on the first two times, I got ejected after pressing the wrong button. Yes, you know how frustrating that is.
But call UOB, and you would quickly get on the line with a customer service officer in 6 minutes.
It’s that fast. In an era where almost every bank has shirked phone customer service, touting how their ‘tech’ can solve your problems, UOB has gone the other way. It’s instead focused on making their phone service just as good as their counter service.
What I’ve loved even more is how fuss-free their app is.
Yes, some might say their app looks old and not as feature rich as the DBS one.
But if you’re honest, you’re going to use your app for some simple functions only. You’re probably going to explore some nifty investment features on it, but you’re not going to transact there, because you feel safer on the desktop.
Just look at the typical PayNow function. With DBS you’ve to click at least 5 buttons to get to paying someone $4 for that char kway teow they paid for you.
But with UOB, just 3 clicks.
- Click PayNow
- Key in the name
- Confirm by sliding
This sounds like a small detail, but when you make such transactions at least thrice a week, it becomes a detail you take note of – how easy the bank’s app is to use.
This builds loyalty, and it prompts people to trust it more.
Their credit card offers are the best in the industry
But if you take a closer look at their credit and debit cards, they have also become market-leading because of the associated discounts and perks.
For example, UOB cardholders could have first dips on the Taylor Swift and Ed Sheeran concert.
Special?
You bet.
But you might be wondering what’s in it for UOB to do this.
After all, don’t they just serve as a middleman? What’s their value add? How do they earn money? Well just look below.
That’s a lot of money, from the tons of transactions flowing their cards every day.
It’s why they don’t mind giving you hundreds of dollars just to switch to their card.
It’s a boring blue bank focused on ASEAN Business
That said, you might have heard people working there say that it’s a boring blue bank, with highly conservative roots.
But you shouldn’t underestimate its focus on the ASEAN growth corridor. Already, we are seeing companies diversify away from China, into other manufacturing hubs in ASEAN like Vietnam and Malaysia.
UOB is one of the banks posed to capitalise on this growth, especially since it has focused on the ASEAN region, compared to the other 2 local banks.
OCBC is looking more towards China, whilst DBS is looking at North Asia through Taiwan and India.
If you see the graphs below, you would quickly see that the loans from UOB are beginning to come more from ASEAN, rather than just Singapore.
But you might see OCBC focusing on China.
Some might argue that banking ASEAN is not so sexy, especially when all you might see is the auntie selling pad Thai by the streets.
But take a step back to the malls of Bangkok, and you would see businesses there that are fundamentally strong, and different to most other businesses.
They have world leading businesses such as Central Pattana, one of the largest developers in Thailand. Walk into their malls, and you would see something that’s so different, and unique to Singapore.
When I was in Nakhon Pathom in September 2024, I was shocked at just how advanced their mall’s design was, compared to Singapore.
In Singapore, you get the same boring malls over and over again. Many things indoors, in a rectangular shape.
Just look at the pigs by the side.
And you would know that it’s not that simple to just write off ASEAN as a region for growth.
UOB is still a family business
Of the 3 listed banks, UOB is the only business that remains run by family. It’s sad that it might be the last generation running it, but as of now, being run by family still ensures that it has a longer-term view to it beyond just profits.
Hear Wee Ee Cheong speak and you would be surprised at how long range his thinking is. He doesn’t just think quarter on quarter, but in terms of decades.
It’s why my money is on them.