UOB to expand digital bank TMRW to Indonesia this year; Q4 net profit up 10% to $1.01b

SINGAPORE (THE BUSINESS TIMES) – United Overseas Bank (UOB) will launch its digital bank, TMRW, in Indonesia this year after first rolling it out in Thailand in March 2019.

In a results presentation deck to be presented to media and analysts, UOB chief executive officer Wee Ee Cheong is set to pinpoint Indonesia as the next market for TMRW.

The move is part of the regional bank’s march to capture a $10 billion market opportunity in Asean.

The digital bank’s $10 billion projection reflects the lifetime value of young professionals in Asean, given an expected surge in demand for more complex financial instruments that will ramp up TMRW’s asset base. To be clear, this is after about five years of transacting with TMRW on plain-vanilla services.

TMRW’s expansion comes as the 84-year-old bank looks to tap the millennial market in the region, where six in 10 are under 35 years old.

TMRW is due to run at a 35 per cent cost-to-income ratio after five years. With an aim to be the world’s most engaging bank, TMRW is also “well-within” its target to be marginal-cost positive in five years, group head of TMRW digital group Dennis Khoo had told The Business Times in January.

The bank aims to scale TMRW with actively engaged customers and recoup total costs from a broader client base of a projected three to five million new customers from this region.

UOB’s Singapore banking peer, DBS, earlier launched its digibank in Indonesia.

UOB posted a 10 per cent rise in net profit for its fourth quarter. Net profit for the three months ended Dec 31, 2019 stood at $1.01 billion, up from $916 million the same period a year ago.

Net interest income increased 2 per cent to $1.64 billion on higher loans, while growth momentum in wealth management and higher card fees drove net fee and commission income up by 2 per cent to $476 million. Trading and investment income also jumped to $224 million from $59 million a year ago, led by improved gains from investment securities on market recovery and stronger customer flows.

Total expenses increased 13 per cent to $1.12 billion, with the cost-to-income ratio at 45.9 per cent.

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