Is UOB breezing through the current China downturn?

Its close Chinese ties are causes for concern.

As massive as the world’s most populous country is, a slowdown in its economic activities could send shockwaves across the globe. This is the case for UOB Bank, which does a notable amount of business in the Asian superpower.

According to a report from OCBC, despite the sluggish Chinese economy, UOB has been holding the fort pretty well, bucking the current weakness in the commodity front.

“Its exposure to China was stable at slightly more than S$20b. Commodity accounted for around 8% of its portfolio and Oil & Gas at about 5%,” OCBC said.

Treading on thin ice, OCBC says UOB management is still comfortable with its exposure at current levels.

“With weakness in market conditions, the emphasis now is on asset quality. Despite the challenging environment, management is still guiding for 5% loans growth for this year, although this could ease slightly with the muted outlook for the region,” OCBC said.