UOB Annual Report 2002 - United Overseas Bank

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2002 in Review Investment Banking Investment Banking comprises our asset management, venture capital management, proprietary investment and insurance activities. Against a lacklustre global equities market, higher provisions were made for a diminution in the value of our investments in 2002. This impacted the profitability of our investment banking businesses as a whole. Consequently, net profit before tax was 55% lower than in 2001. Asset Management Our assets under management and advice and committed capital grew to $15.6 billion at end-2002 despite a difficult year. Assets under management amounted to $15.2 billion while committed capital totalled $360 million. The growth was driven by several major initiatives and achievements from our investment management subsidiaries in Singapore, Malaysia, Taiwan, France and USA. UOB Asset Management • Appointed as the Collateral Manager for two CDO transactions – United Global Investment Grade CDO I (US$1.33 billion) and United Global Investment Grade CDO II (US$1.7 billion) – that invest in a portfolio of global investment grade credit default swaps. With 12 CDOs now under its management and advice, UOB Asset Management (UOBAM) has become one of Asia's leading managers of CDOs and CBOs (Collateralised Bond Obligations). Our trained Personal Bankers provide financial solutions, with personal attention, to satisfy the wider and growing financial needs of our customers. Grow our customers • Launched three new unit trusts and consolidated the 20 funds under the management of OUB Optimix Funds Management. This brings the total number of funds and sub-funds under its management to 55 by year-end, with assets under management totalling $1.4 billion. The three new unit trusts comprised two guaranteed funds, and a 54
Our subsidiary, UOB Asset Management, is Singapore's most awarded fund manager, having won more than 50 performance awards since 1996. GrowthPath – a core investment product – offers customers a new way of investing, by providing them with a framework to build and grow their investment portfolios. core investment product called GrowthPath. GrowthPath is a single yet broadly diversified investment portfolio that dynamically adjusts its asset allocation with time. It is the first such product to be introduced to the Singapore market. Investing in a combination of global equities and global bonds, GrowthPath offers a choice of five portfolios that are tailored for investors with different time horizons and different risk tolerance levels. • Won five out of 22 awards in the Standard & Poor's Investment Funds Award Singapore 2003 and an award in the Standard & Poor's Investment Funds Award 2003 in Taiwan. • Won 10 out of 33 awards in the Singapore Investment Fund Awards 2002. • Entered into an agreement with New York-based PlusFunds Group Inc. and Standard & Poor's to provide a unique index product for the growing hedge funds business in Singapore and other selected Asian markets. The agreement was negotiated and structured with the assistance of UOB Global Capital. UOB-OSK Asset Management • Won two mandates from a major local asset management firm in Malaysia to manage retail funds. UOB Venture Management • Managed five funds totalling $360 million in committed capital. • Established a RMB300 million investment company in Beijing with Oxford Cambridge Investment Group, Beijing and Shandong Hi-Tech Investment Company Limited to invest in Chinese companies that have the potential to achieve high growth over the medium to long term. UOB Investment Consultancy (Beijing) Limited, a subsidiary of the Group, is the advisor to the investment company. • Set up an offshore fund company, UOB Venture (Shenzhen) Limited, in the Republic of Mauritius to invest in promising high growth technology and technology-related projects in China, following an investment agreement with Shenzhen Venture Capital Co., Ltd (SZVC) [now known as Shenzhen Capital Group Co., Ltd]. The fund is managed by SZVC-UOB Venture Management Co., Ltd, a joint venture fund management company between UOB and SZVC in China. UOB Global Capital • Built on its relationship with the Kinetics Group and further developed its hedge fund products to capitalise on the growing investor trend towards absolute return products. Assets under management have grown substantially from a prestigious investor base. • Achieved a final close for the UOB Hermes Asia Technology Fund, raising US$68.5 million from major institutional investors in the USA, Europe and Asia. The Fund is being advised by UOB Venture Management. International Operations Our overseas network outside Singapore comprises more than 180 offices in 17 countries and territories, operating in the Asia-Pacific region, Western Europe and North America. UNITED OVERSEAS BANK 55
Page 1 and 2:
ANNUAL REPORT 2002 United for Growt
Page 3 and 4:
Our Mission To be a premier bank in
Page 5 and 6: Performance in Brief Profit For The
Page 7 and 8: Profit growth was derived mainly fr
Page 9 and 10: Financial Highlights Group Assets 2
Page 11 and 12: Group Return On Average Shareholder
Page 13 and 14: Corporate Information Honorary Life
Page 15 and 16: Left to right: Koh Beng Seng, Ngiam
Page 17 and 18: Left to right: Tan Kok Quan, Prof L
Page 19 and 20: Mr Francis Lee Chin Yong Managing D
Page 21 and 22: The Bank has a budget for directors
Page 23 and 24: independent and non-executive direc
Page 25 and 26: work of each of the banking subsidi
Page 27 and 28: Risk Management Credit and Country
Page 29 and 30: The composition of loans and advanc
Page 31 and 32: Group Non-Performing Loans (NPLs) a
Page 33 and 34: Group NPLs and Cumulative Provision
Page 35 and 36: Group Specific Provision by Region
Page 37 and 38: Collateral Types The majority of th
Page 39 and 40: Exposure to the Five Regional Count
Page 41 and 42: Cross-Border Exposure to the Five R
Page 43 and 44: Complementing the static analysis i
Page 45 and 46: Sources of Deposits The Group has a
Page 47 and 48: The VaR calculations are performed
Page 49 and 50: Group Daily VaR Distribution for 20
Page 51 and 52: As part of the Group's comprehensiv
Page 53 and 54: The celebratory light-up linking UO
Page 55: services so as to meet the increasi
Page 59 and 60: Grow our services In line with the
Page 61 and 62: exercise, achieved well ahead of th
Page 63 and 64: processes in place that will suppor
Page 65 and 66: Group Financial Review Review of Fi
Page 67 and 68: Group Profits The Group achieved a
Page 69 and 70: Analysis of Changes in Net Interest
Page 71 and 72: Cost Savings from Integration The G
Page 73 and 74: Overview of Balance Sheet Assets Mi
Page 75 and 76: Gross Customer Loans Analysed by Cu
Page 77 and 78: Capital Adequacy Ratios The Capital
Page 79 and 80: Directors’ Report for the financi
Page 81 and 82: In addition, the following subsidia
Page 83 and 84: Arrangements to Enable Directors to
Page 85 and 86: Ability to Meet Obligations No cont
Page 87 and 88: Share Options of the Bank (a) From
Page 89 and 90: (d) (e) (f) No options have been gr
Page 91 and 92: Statement by Directors for the fina
Page 93 and 94: Income Statements for the financial
Page 95 and 96: The Group The Bank Note 2002 2001 2
Page 97 and 98: The Group 2001 Non- Share of Share
Page 99 and 100: The Bank 2001 Non- Share Share Dist
Page 101 and 102: Notes to the Financial Statements f
Page 103 and 104: (e) Investments (i) Singapore Gover
Page 105 and 106: (k) Derivative Financial Instrument
Page 107 and 108:
4 Interest Expense The Group The Ba
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(c) Equity Compensation Benefits Op
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11 Directors’ Fees and Other Remu
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14 Tax (a) The tax charge to the in
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2002 2001 Fair Value of Depreciable
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Deferred tax assets and liabilities
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18 Non-Distributable Reserves (a) T
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19 Revenue Reserves (a) The Group 2
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(c) The interim dividend paid in sp
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23 Debts Issued The Group The Bank
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(b) Included in other government tr
Page 129 and 130:
(c) Total gross trade bills and adv
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29 Other Assets The Group The Bank
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32 Investments in Subsidiaries (a)
Page 135 and 136:
33 Movements in the Provisions for
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34 Fixed Assets (a) The Group 2002
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(e) Certain freehold and leasehold
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39 Derivative Financial Instruments
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(c) Derivative financial instrument
Page 145 and 146:
The Group - 2001 Individual Institu
Page 147 and 148:
(b) Secondary Reporting Format - Ge
Page 149 and 150:
Discussions on the main financial r
Page 151 and 152:
The Group - 2002 Hong Singapore US
Page 153 and 154:
Other foreign exchange exposures of
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The Group - 2002 Non- Over 7 Over O
Page 157 and 158:
The Group - 2001 Non- Over 7 Over O
Page 159 and 160:
The Group - 2002 Over 7 Over Over O
Page 161 and 162:
The Group - 2001 Over 7 Over Over O
Page 163 and 164:
Where quoted and observable market
Page 165 and 166:
Percentage of Paid-Up Capital Held
Page 167 and 168:
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Page 171 and 172:
Investor Reference Financial Highli
Page 173 and 174:
1998 1997 1996 1995 1994 1993 1992
Page 175 and 176:
1998 1997 1996 1995 1994 1993 1992
Page 177 and 178:
Statistics of Shareholdings as at 1
Page 179 and 180:
Changes in Share Capital The follow
Page 181 and 182:
Our International Network Banking S
Page 183 and 184:
United Overseas Bank (Malaysia) Bhd
Page 185 and 186:
UOB Venture Management (Shanghai) C
Page 187 and 188:
Notes to Resolutions 4, 6, 7, 8, 9,
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Notes: 1 Please insert the number o
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UOB Annual Report 2002 - United Overseas Bank

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