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As UOB profits slump 40% two sets of employees are still doing well

Traders and technologists enjoyed a good Q3 at UOB, even as the bank reported a 40% year-on-year drop in quarterly net profit to S$668m, driven by loan-loss provisions and declines in interest income. Net profits were down 33% in the year to end-September.

Operating profits in global markets were up 69% for the first nine months as UOB followed its US and European peers in benefiting from market volatility. The division registered a “stronger trading performance and gain from sale of investment securities, as well as higher revenue from funding and liquidity management on the back of a sharp decrease in interest rates,” according to UOB’s earnings report, which was published today.

Profits in group wholesale banking inched up 1%, “supported by loans, trade and treasury products”. Group retail’s profits were down 5%, “affected by declining interest rates, partly moderated by healthy deposit growth, higher wealth income, and expense management”.

Meanwhile, CEO Wee Ee Cheong praised the work of the firm’s tech professionals, who took advantage of Covid-19-related surges in digital usage to accelerate UOB’s “omni-channel approach” to digital banking. He singled out platforms such as the app UOB Mighty and the Southeast Asian virtual bank TMRW, which have seen a “rise in engagement and transactions”. UOB has also been hiring in tech through the year and the third quarter. About 41% of UOB’s current vacancies are in technology.

Overall, however, there are signs of natural attrition from UOB’s headcount. While UOB has pledged not to make layoffs during the pandemic, its headcount was down 1.4% to 26,495 in the six months to end-June. UOB did not publish its end-September workforce figures, but staff costs for the first nine months fell 7.5% to $1,888m.

UOB also revealed in its results that 10,000 of its staff – or about 37% of its workforce, going by June figures – were working remotely in October. This suggests that UOB, like other banks in Singapore, is slowly increasing its office-based staffing levels. In September, UOB us told that 50% of its employees were working from home.

The bank confirmed that it is still “providing additional allowances, family care leave and face masks” for staff as well as “educational webinars” focused on physical and mental wellness. It has also offered on-the-job training for 100 graduates for up to 12 months with potential conversion to permanent positions, a likely reference to its participation in the SG United training programme, which the government introduced earlier this year in response to the pandemic.

Image credit: unsplash

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AUTHORSimon Mortlock Content Manager

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