Billionaire Wee Cho Yaw’s UOB Rises To Record High Amid Optimism Over `Game-Changing’ Citibank Deal

Shares of United Overseas Bank—controlled by Singaporean billionaire Wee Cho Yaw—climbed to a record high amid growing optimism the recently announced acquisition of Citibank’s consumer banking business across Indonesia, Malaysia, Thailand and Vietnam will transform the Singapore-based lender into a regional powerhouse.

Daiwa Capital Markets dubbed the transaction “game-changing” in its research note published after the deal was announced on January 14. UOB agreed to pay Citibank about S$4.9 billion ($3.6 billion), which includes a premium of S$915 million on top of the business’ aggregate net asset value of S$4 billion as of June last year. Since that day, UOB shares had risen almost 12%, touching a record intraday high of S$32.66 as of 3:18 pm in Singapore.

“Acquiring the Citi businesses in markets that UOB already understands well is consistent with its retail strategy and will also provide attractive scale,” Daiwa analyst David Lum wrote in his research note last month.

The acquisition—which doubles UOB’s customer base to 5.3 million across the region—will be immediately earnings accretive, UOB said. The Citigroup regional business generated income of about S$500 million in the first half of 2021. Depending on regulatory approvals, the transaction is expected t be progressively completed from mid-2022 through early 2024.

“The acquired business, together with UOB’s regional consumer franchise, will form a powerful combination that will scale up UOB Group’s business and advance our position as a leading regional bank,” UOB deputy chairman and CEO Wee Ee Cheong said in a statement as he announced the acquisition last month. Ee Cheong is the eldest son of banking and real estate tycoon Wee Cho Yaw, who is currently the bank’s chairman emeritus after stepping down in 2013.

UOB, Singapore’s third-largest lender by assets, was cofounded in 1935 by Wee Cho Yaw’s father Wee Khiang Cheng as United Chinese Bank. Apart from his controlling interest in the bank, Wee, 93, holds significant stakes in real estate companies including UOL Group and Kheng Leong. With a net worth of $6.8 billion, he was ranked No. 9 on the list of Singapore’s 50 Richest that was published in August. His net worth has since risen to $7.8 billion currently, according to Forbes’ real-time data.