PETALING JAYA: The retail banking business of UOB Malaysia is expected to get a boost as it is set to account for almost half of the bank’s revenue over the next three years.
Managing director and country head of personal financial services (PFS) Ronnie Lim said the retail banking business contributes more than a third to UOB Malaysia’s revenue currently.“With the acquisition of Citi’s consumer banking business in Malaysia, we anticipate that the contribution will increase to almost 50% over the next three years.
”Citi’s consumer banking business will scale up our business and strengthen our franchise in Malaysia, together with UOB’s regional consumer franchise.
“The acquisition is timely and a strategic fit as there is a lot of synergy and common focus in both portfolios,” he told StarBiz.
Furthermore, he said it would complement UOB Malaysia’s broader strategy and the bank would be fast tracking its digital capabilities and customer propositions to increase customer experience and satisfaction.
PFS or retail banking also include cards, wealth management and loans.
On the PFS portfolio that would drive the bank’s business, Lim said apart from catalysing growth and doubling its customer base, the acquisition would elevate UOB Malaysia’s position as one of the top card issuers in the country and among the Top 3 in the region.
Customers can also look forward to more deals and offerings in travel, retail and dining as the bank expands its ecosystem partnerships with leading brands across the region, according to Lim.
About 40% of the assets acquired are unsecured and mainly comprised Citi’s sizable credit card operations, which will complement UOB Malaysia’s mostly secured portfolio.Post acquisition, the overall loan portfolio is likely to grow by about 15% while the retail customer base will increase by 70% to 1.5 million.
UOB entered into agreements to acquire Citigroup’s consumer banking businesses comprising unsecured and secured lending portfolios, wealth management and retail deposit businesses in Indonesia, Malaysia, Thailand and Vietnam on Jan 14.
The Singapore-based bank paid a total cash consideration, calculated based on an aggregate premium equivalent to S$915mil (RM2.98bil) plus the net asset value of the consumer business, as at completion to seal the deal. UOB completed the acquisition of Citigroup’s consumer banking businesses in Malaysia on Nov 1.
Lim said the integration of Citi and UOB consumer banking portfolios in the country is currently underway. Until the completion of the integration in the next 12 months, he said UOB Malaysia would be operating on two separate banking platforms to ensure a smooth transition.
On the bank’s competitive strength in the PFS segment compared with other players in the market, Lim said the bank would be harnessing the synergy from the combined franchise and expertise of the acquisition of Citi Malaysia.
More privileges and rewards
With the expanded partner network, market knowledge and footprint, UOB Malaysia will offer customers more privileges and rewards as well as a wider range of products and services, according to Lim.
To deliver on its purpose in line with its latest global branding exercise, he said the bank would double down on strategic areas including personalisation.
“Personalisation captures the bank’s focus on customer-centricity and commitment to understand the unique needs of each customer, achieved through a combination of data and relationship-led insights.
“This enables UOB Malaysia to create solutions that are closely aligned to the customers’ needs, in a manner that engages them and better anticipate their life goals for the future.
“We will be focused on our key differentiator, personalisation, to set us apart from our competitors,” Lim said.
UOB has gone through a global brand refresh in line with its purpose of building the future of Asean: For the people and businesses within, and connecting with Asean – a statement reflecting the bank’s long-term strategy and commitment to the region.
As a key component of brand refresh, the purpose statement underscored UOB’s promise to do right by its customers, colleagues and the community.
UOB Malaysia is holding firm to its omni-channel strategy which involves transforming the bank’s physical branches and scaling up its digital capabilities.
Over the past three years, the bank has been executing its branch transformation strategy to cater to the increasing customer demand for wealth and financial planning services via its UOB Privilege and Wealth Banking relationship programmes.
“To date, we have reconfigured and relocated 10 of our flagship branches and wealth centres and in the process of completing 50% of our targeted branches,” he said.
The branches are in Bangsar, Puchong, Sri Petaling, Kota Damansara, Bukit Tinggi (in the Klang Valley), Kuching and Sandakan in Sarawak and Sabah as well as Jalan Kelawei, Lebuh Bishop and Sungai Petani in the northern region of the peninsula.
“We are completing the renovation of our main branch at our new headquarters at UOB Plaza 1 in Kuala Lumpur and the branch at Plaza Mahkota, Melaka.
“Over the next two years, we aim to upgrade and relocate more branches. To better serve our customers, we will continue to find ways to be located closer to their place of work or residence,” Lim added.
On the digital front, he said the Citi Malaysia acquisition is timely as both portfolios have a lot of synergy and common focus by complements the bank’s broader strategy.
Having set aside RM1bil over the next three years, he said UOB Malaysia is also investing in its digital capabilities for retail banking.
Over the past two years, the bank had introduced its artificial intelligence-driven digital banking and digital account opening services on its mobile banking app UOB Mighty.
UOB Malaysia was also the first in South-East Asia to tap into its partner’s digital platform to introduce facial recognition.
“This easily enables our customers to access our solutions that cater to the diverse wealth needs and behaviours from savings, bancassurance to investment offerings,” he noted.