United Overseas Bank SWOT and PESTLE Analysis

Strength

This section is available only in the 'Complete Report' on purchase.

Weakness

1. GMIM division has low profitability: Global markets and investment management provides a comprehensive range of treasury products and services, including future broking, gold products, derivatives, margin trading, foreign exchange, fixed income, as well as an array of structured products.

The Profit segment decreased to 17.1% from $121 million in 1Q13, mainly attributed to higher operating expenses and impairment charges, lower income from trading and interest rate management activities.

2. Possibility of higher loan rates: As per the report published in Business times UOB and HSBC also entered into the mortgage war with the players now in market as DOB and Bank of China. The Rates of Fixed rate loan packages provided by BOC were as 1.48 in Year 1, 1.58 in Year 2, 1.68 in Year 3 whereas the Interest rates provided by UOB were 1.68 for Years 1, 2, and 3 respectively.

Opportunity

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Threat

1. Changes in Tax rates: The change of tax rates in the various countries and the tax policies are likely to create threat for UOB on a global platform. The implementation of Polices like GST and the Tax slabs are affecting the Balance sheets and cash flows of Banks.

2. Core earnings likely to affect due to lower interest rates: The core earnings of UOB are likely to affect due to low rates and continuous competition in the market. The interest rate on an amount of $10000 was tending to be 1.50% amounting to an interest of $150 whereas in case of Bank of China it was 2.225% amounting to $ 223 per year.

References

1. https://www.forbes.com/companies/united-overseas-bank/

2. https://www.uobgroup.com/assets/pdfs/new-release/NR_UOB_catalyst_Japanese_investment_SEA.pdf

3. https://www.businesstimes.com.sg/real-estate/uob-hsbc-join-mortgage-war-with-3-year-fixed-rate-packages

4. https://www.cnbc.com/2017/06/05/india-overtakes-china-as-the-most-promising-market-for-retail-expansion.html

5. https://www.ey.com/Publication/vwLUAssets/EY-banking-in-asia-pacific/$FILE/EY-banking-in-asia-pacific.pdf

Political

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Economic

This section is available only in the 'Complete Report' on purchase.

Social

1. Worldwide presence and global platform for Growth and Knowledge sharing: Presence of UOB in 500+ locations across 20 countries helps to share knowledge across cultures and create standardization. It also employs 20000+ workforces worldwide consisting of highly skilled workforce and provides them training. It is termed as the world’s biggest companies globally by Forbes.

Technological

1. Services provided by UOB include Internet Banking, Business Intelligence, Customer Management, Risk management and Information security: These services provided by UOB in the countries are helping to increase its customers at a faster pace. The penetration of these services needs to be done better in the rural areas. As per the report published by EY it says that Urban areas had 205 million total internet users in October 2013 that accounted for 40% y-o-y growth, while rural areas had 68 million users and 58% y-o-y growth rate.

Legal

This section is available only in the 'Complete Report' on purchase.

Environmental

1. Reduced footprint: With the use of technology particularly with Internet banking, mobile banking apps etc, the use for paper are being reduced. UOB use built in portals in the website to record and share information between countries and customers.

References

1. https://www.forbes.com/companies/united-overseas-bank/

2. https://www.uobgroup.com/assets/pdfs/new-release/NR_UOB_catalyst_Japanese_investment_SEA.pdf

3. https://www.businesstimes.com.sg/real-estate/uob-hsbc-join-mortgage-war-with-3-year-fixed-rate-packages

4. https://www.cnbc.com/2017/06/05/india-overtakes-china-as-the-most-promising-market-for-retail-expansion.html

5. https://www.ey.com/Publication/vwLUAssets/EY-banking-in-asia-pacific/$FILE/EY-banking-in-asia-pacific.pdf