UOB optimism buoyed by nascent boom in Thailand

Trade financing and transactional banking growing.

"Management were generally positive on UOB’s business, presence and growth in Thailand. This optimism is supported by rising regional trades (trade financing), transactional banking activities and the trend of more Thai corporates and SMEs growing outside of the domestic market," said OCBC after recently meeting with UOB's core Thailand management team.

UOB Thailand (UOBT) has grown to around 156 branches, 358 ATMs and employing about 4200 people as of Jun 2013.

How else is UOB Thailand growing its business and what are its plans for the medium-term horizon?

Here's more from OCBC:

Optimism tempered with prudence. The emphasis on quality new clients and its prudent credit criterions have enabled its Thai operation to enjoy reasonable margin and volume, both from retail and SME clients. The main products are consumer loans, SME loans, trade-related products/services, cross border transactions advisory/structuring services, etc. Profit before tax grew from THB1845m in 2010 to THB2927m in 2012, giving a CAGR of 26% (FY10-12). Despite this growth, its NPL ratio edged lower from 4.98% in 2010 to 3.10% in 2011 and 2.12% in 2012. In terms of its loans breakdown, Personal Financial Services (PFS) accounted for the bulk at 45% as of Jun 2013. This is followed by Commercial (26%), Corporate (17%) and Business Banking (12%).

Aspiration to become a medium-sized Thai bank. Management intends to be a medium-sized bank in Thailand. Some of the key areas of emphasis include PFS (growing its market share for deposits, credit cards, personal loans, housing loans, etc), Corporates and SMEs. The former is also seen in the rise in the number of privilege banking clients - 11,462 with AUM of THB115.3b in FY12 to 12,996 with AUM of THB121.3b in 1H13. The SME market is dominated by family businesses doing domestic businesses, and could benefit from imports/exports growth and higher trade activities.