United Overseas Bank Ltd Talks About Brexit and its Exposure to Europe

United Overseas Bank Ltd (SGX: U11)  held its second-quarter earnings briefing recently.

Brexit and UOB’s exposure to Europe were among the topics discussed. Wee Ee Cheong, UOB’s deputy chairman and chief executive officer, said the following in his opening statement:

“Since our meeting earlier this year, it has been a roller coaster ride for the global markets. Concerns over the oil and gas segment, China’s slowing economy and Brexit added further uncertainty.”

Later on, UOB’s chief financial officer Lee Wai Fai gave some context on UOB’s exposure to Europe. His focus was on the slide below:

Source: UOB’s earnings presentation

Lee commented:

“The total exposure to Europe was S$7.7 billion of which UK (United Kingdom) amounted to S$3.6 billion or 1.1% of total assets. The direct impact of Brexit is minimal with the bulk of our non-bank exposure in UK secured and denominated in [British] Pounds.”

Earlier, Wee also expressed confidence in UOB’s financial standing:

“Despite market volatility, our financial position and balance sheet remains strong. And this is reflected in our steady financial results in the first half year.”

At the moment, it’s too early to judge the impact of Brexit on companies that are exposed to Europe and the UK as formal talks on the UK’s exit from the European Union have not started. We will have wait to observe what happens next, if at all. In any case, UOB has stated that its exposure to Europe is limited.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.