UOB boosts pay by 14% as profits soar in the first quarter

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UOB Q1 2018 results

UOB may be the smallest of Singapore’s three local banks, but it’s just posted record quarterly profits of $978m for Q1 – a 21% rise from a year earlier. If you’re thinking of joining UOB, here’s what its first quarter financial results say about jobs and recruitment at the Singaporean lender.

UOB increased its headcount by 255

UOB employed 255 more people in Q1 than a year previously – a reasonable but not spectacular rise – taking its total headcount to 25,288. The expansion wasn’t just about taking on more retail banking staff. “Talent acquisition” helped to fuel an 8% rise in expenses within Group Wholesale Banking, while staff costs boosted expenses in its Global Markets division. UOB has also been hiring in technology (see below).

UOB is paying better

Staff costs per head – total employee expenditure (such as salaries and bonuses) divided by total headcount – rose 14% year on year. UOB spent $23,964 on its average employee in Q1 2018, up from $21,012 in Q1 2017, according to calculations made from data in its Q1 financial results. That still makes it a less generous paymaster than local rival DBS, which reported its results earlier this week, but the gap is narrowing. In the first quarter last year, DBS staff earned $10,827 more than their UOB counterparts, but the difference is now only $6,544.

Bonuses were good

UOB’s financial report suggests that the rise in average pay wasn’t just triggered by new recruits receiving above-par remuneration. There were also “higher performance-related staff costs” (i.e. bonuses) across the firm.

You’ll want to work in Global Markets

UOB Global Markets, which offers treasury products and services across asset classes, is experiencing higher growth than other divisions at the bank, although it remains significantly smaller than both the wholesale and retail units. Compared with a year ago, operating profit in GM rose 24% to $80m while total income registered growth of 20%, “driven by favourable foreign exchange movements”.

UOB continues to hire in tech

As we’ve been reporting over the last nine months, much of UOB’s recent recruitment has focused on Singapore-based technology roles. UOB is taking on more engineers, analysts, digital designers, architects, project managers and data scientists, Susan Hwee, head of group technology and operations, told us in September. This is reflected in the bank’s Q1 results. An 11% year-on-year increase in total expenses was partly caused by “IT-related expenses, as the group continued to invest in talent, technology and infrastructure to enhance its connectivity, digitalisation, product capabilities and services”.

Investment bankers emerge from the shadows

UOB probably wouldn’t be your first point of call if you were looking for a front-office job in investment banking. It came in 10th position for Singapore ECM volume by bookrunner in Q1 and didn’t make any regional top-10 rankings for DCM or M&A last quarter, according to Dealogic. However, IBD was one of the Q1 highlights within UOB’s Global Wholesale Banking unit. A 4% year-on-year increase in non-interest income in GWB was partly “driven by higher fees from investment banking”.

UOB is a now a player in Asian private banking

In contrast to investment banking, UOB has already established itself as a fairly significant player in private banking. In 2016, it broke into the top-20 private banks in Asia by assets for the first time and currently stands in 16th place (albeit behind local rivals DBS and Bank of Singapore). At the end of 2017, it employed 144 relationship managers, a 25% increase over the previous year, according to Asian Private Banker. Revenues from wealth management were one of the main causes of income growing 6% to $963m in UOB’s Group Retail unit.

Image credit: tupungato, Getty

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