UOB is set to relocate certain back and middle-office operations to Malaysia, primarily in Kuala Lumpur, according to The Business Times.

This strategic move aims to maintain the bank’s cost-to-income ratio at 40% by 2026, according to Group Chief Financial Officer Lee Wai Fai.

This relocation, coupled with anticipated growth across ASEAN and a greater focus on non-interest income, is expected to help UOB sustain its return on equity (ROE) at approximately 14% by 2026.

Lee emphasized Kuala Lumpur’s appeal as a talent hub, highlighting its ability to provide the high-quality workforce UOB seeks.

The offshoring strategy, driven by cost considerations in Singapore, will see an acceleration of existing efforts, including the centralization of card centers and potential expansion into areas like compliance.

Lee stressed the importance of organizational restructuring and process improvement, supported by investments in both personnel and technology.

UOB’s growth strategy also includes ambitions in key ASEAN markets (Indonesia, Malaysia, Thailand, and Vietnam), with income from these markets projected to reach 30% by 2026.

The bank anticipates non-interest income contributing 37% of overall income by 2026, driven by growth in wealth management, trade finance, and customer treasury services.

The wholesale business is shifting its focus towards trade, cash management, and treasury, aiming to double trade loans and increase income contributions from the four key ASEAN markets.

The retail business, bolstered by the acquisition of Citi’s retail franchise in those markets, is expected to benefit from regional wealth growth.

UOB aims to serve around 10 million retail customers in the region within the next three years, up from the current eight million.

The Citi acquisition has accelerated the bank’s regional expansion plans.

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