UOB Annual Report 2002 - United Overseas Bank

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Chairman's Statement In line with our strategy to expand our business activities in Greater China, our Representative Office in Beijing was upgraded to a full branch in November. During the year, our Shenzhen Branch was granted a licence to conduct Renminbi transactions for foreign companies and nationals, while our Shanghai Branch was licensed to offer foreign currency services to local companies and individuals in China. UOB Shanghai Branch is also an Authorised Approving Centre for capital accounts, making UOB the first South- East Asian bank to handle such capital account transactions in Shanghai. During the year, we also established a RMB300 million investment company in Beijing with the Oxford Cambridge Investment Group and Shandong Hi-Tech Investment Company Limited, and launched the UOB Credit Card in Hong Kong S.A.R. At home, we continued to build up our IT infrastructure and rationalise our branch operations to further upgrade our customer service. The newly established Operations Sector has also achieved significant progress in implementing straight-through processing for the convenience of customers. 2003 Prospects The 2003 business climate is clouded with uncertainties. The war in Iraq and its aftermath will have a significant impact on the world economy. In Singapore, the official estimate is a growth of between 2% to 5%, the wide variation being a reflection of the uncertain outlook. UOB believes that growth will be closer to the lower end of the estimate. The industrial and commercial property market is expected to continue to be weak, and Singapore's high unemployment rate is likely to remain as the economy goes through a restructuring exercise. The tourism industry has been dealt a double blow with the war in Iraq and the outbreak of the Severe Acute Respiratory Syndrome in March. Under the circumstances, the Group will focus on growing our regional business even as we strive to maintain our leading position in Singapore. Our enlarged UOBM should see continued expansion in its corporate and consumer business as the Malaysian economy strengthens. UOB Radanasin Bank is expected to become profitable and United Overseas Bank Philippines intends to increase its business activities this year. In China, we intend to look for a suitable financial institution to form a strategic alliance. In connection with this, we have held talks with several Chinese banks. Our strategy in Greater China is two-pronged. We intend to add depth and breadth to our scope of business activities and services, and we will continue to use our resources to assist our Singapore and regional customers who have interests in that country. Acknowledgements 2002 has been an eventful and rewarding year for UOB. For this, credit must go to the wise counsel provided by our distinguished Board of Directors and the dedication and hard work put in by management and staff members. I take this opportunity to thank them for their contributions. During the year, Mr John C Dean Jr decided to step down from the Board. The Board thanks him for his past service and wishes him success in his new endeavours. UOB's Senior Deputy Chairman and Board Director, Mr Lee Hee Seng, has decided not to seek re-election at the forthcoming Annual General Meeting and to retire from the Bank. Mr Lee contributed greatly to the smooth integration of UOB and OUB and it is with deep regret that the Board accepts his decision. On behalf of the Board, I thank Mr Lee for his invaluable advice and contributions. The Board and I wish him many happy years of retirement. Wee Cho Yaw Chairman & Chief Executive Officer March 2003 6
Financial Highlights Group Assets 2002: $107,469 million – 5.6% 2001: $113,888 million Group Customer Deposits 2002: $67,919 million – 8.8% 2001: $74,452 million 120000 110000 100000 90000 80000 80000 70000 $ million 70000 60000 $ million 60000 50000 50000 40000 40000 30000 30000 20000 20000 10000 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 $ 50,789 56,774 66,324 113,888 107,469 US$ 30,587 34,068 38,293 61,528 61,910 $ 36,492 40,728 43,406 74,452 67,919 US$ 21,976 24,439 25,061 40,223 39,126 Group Customer Loans Group Loans/Customer Deposits Ratio 2002: $58,884 million – 3.3% 2002: 86.7% + 4.9% points 2001: $60,892 million 2001: 81.8% 80000 110 70000 100 $ million 60000 50000 40000 30000 % 90 80 70 20000 60 10000 50 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 $ 27,653 27,259 30,045 60,892 58,884 75.8% 66.9% 69.2% 81.8% 86.7% US$ 16,653 16,357 17,347 32,897 33,921 Note: Where applicable, figures/ratios in this section have been adjusted for impact of adopting Singapore Statement of Accounting Standard (SAS) 10: Events After Balance Sheet Date with effect from 2000, and for impact of adopting revised SAS 12: Income Taxes and Interpretation of SAS (INT) 5: Consolidation – Special Purpose Entities with effect from 2001. UNITED OVERSEAS BANK 7
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: Profit growth was derived mainly fr
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 and 56: services so as to meet the increasi
Page 57 and 58: Our subsidiary, UOB Asset Managemen
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
Page 109 and 110:
(c) Equity Compensation Benefits Op
Page 111 and 112:
11 Directors’ Fees and Other Remu
Page 113 and 114:
14 Tax (a) The tax charge to the in
Page 115 and 116:
2002 2001 Fair Value of Depreciable
Page 117 and 118:
Deferred tax assets and liabilities
Page 119 and 120:
18 Non-Distributable Reserves (a) T
Page 121 and 122:
19 Revenue Reserves (a) The Group 2
Page 123 and 124:
(c) The interim dividend paid in sp
Page 125 and 126:
23 Debts Issued The Group The Bank
Page 127 and 128:
(b) Included in other government tr
Page 129 and 130:
(c) Total gross trade bills and adv
Page 131 and 132:
29 Other Assets The Group The Bank
Page 133 and 134:
32 Investments in Subsidiaries (a)
Page 135 and 136:
33 Movements in the Provisions for
Page 137 and 138:
34 Fixed Assets (a) The Group 2002
Page 139 and 140:
(e) Certain freehold and leasehold
Page 141 and 142:
39 Derivative Financial Instruments
Page 143 and 144:
(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
Page 155 and 156:
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:
Page 169 and 170:
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,
Page 189:
Notes: 1 Please insert the number o
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UOB Annual Report 2002 - United Overseas Bank

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