UOB puts focus on Asean investment

UNITED OVERSEAS BANK (UOB), one of the largest Asian banks, is actively engaged in bringing foreign investors to Thailand, particularly the flagship investment project in the Eastern Economic Corridor, according to its chief executive.

Asked which Asean countries were now the most attractive for foreign direct investment in the eyes of UOB, Choon Hin Tan, president and CEO of United Overseas Bank (Thai), said they were Thailand, Vietnam and Indonesia. “As the world becomes connected, and due to our regional strength, we provide regional solutions for our customers, and regional companies find us a lot more useful to them,” Tan said in an exclusive interview with the Nation Group.

Positioning itself as Asia’s regional bank, the UOB Group has set up a foreign direct investment (FDI) advisory unit.The unit facilitates more than 27 billion Singapore dollars (Bt667 billion) worth of business flows into Southeast Asia and from Southeast Asia to China last year – double the amount of the year before, he said.

The top investment destinations from global and Asian companies investing in the region in 2016 were Indonesia, Malaysia, Myanmar, Singapore and Thailand, according to UOB.

Most investments have come from companies based in China, Hong Kong, Malaysia, Singapore and Thailand. As the Thai government implements its Thailand 4.0 policy and encourages investment in the Eastern Economic Corridor (EEC), UOB has noted an increase in Chinese investment in Thailand.

Chinese investors mostly do businesses with UOB, while Japanese investors do business with Japanese banks, said Tan. In the first quarter of this year, UOB facilitated about Bt2.7 billion of Chinese investment in Thailand. This represented more than 40 per cent growth on its 2016 full-year investment, according to a bank statement.

Data from the UOB’s FDI advisory unit showed that Chinese companies expanding into Thailand came from the fast-moving consumer goods, natural resources, automotive and electronics sectors.

Thai investors who invest abroad also use its investment unit, the bank said, noting that it has 500 branches covering most countries in Asia, plus Australia, the United Kingdom, France, the United States and Canada.

Last year, UOB Thai facilitated cross-border investment between Thailand and China worth Bt1.8 billion. Many Thai companies are making greater investments in Cambodia, Laos, Myanmar and Vietnam (CLMV) and other Asean countries.

UOB foresees a continued flow of investment into the Asean region due to its economic growth – which is the fastest in the world – rising middle classes, and plans for huge infrastructure projects, including high-speed railways, roads, sea ports, electricity plants and the digital economy.

However, many governments in the region have faced rising public debt. Asked whether these governments would have adequate financial resources to finance their ambitious projects, Tan said that combined public and private funds could further drive investment in the region.

Regarding Thailand’s flagship EEC and Thailand 4.0 policy, Tan said that investors’ views are quite diverse. Some are very sceptical while others are positive.

“Personally, I think even if the entire government plan does not happen, but a fraction does happen, it will be good for the economy. I do think that, eventually, it will happen,” he said.

UOB Thai was born from the 1997 Asian financial crisis when many local Thai banks and other financial institutions were badly hit. UOB Group acquired Radanasin Bank in 1999 and Bank of Asia in 2004.

The bank has claimed significant growth in the past decade. Its number of customers increased 58 per cent last year, revenue went up 109 per cent and operating profit surged 176 per cent. With the Thai Government, the bank has initiated PromptPay, an e-payment service to promote a cashless society.

Source: The Nation

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