Fubon Bank to benefit from UOB’s China retail banking exit: S&P

Fubon has the economies of scale to get more traction out of the business.

UOB’s decision to divest its Chinese retail banking business will benefit Fubon Bank.

On 24 February, UOB announced that it will sell its retail banking business in China to Fubon Bank (China). UOB will retain its corporate banking operations in the country.

“The strategic move will allow the Singapore-based banking group to focus on the corporate segment in China and capitalize on Asia's growth potential,” S&P Global Ratings said in a commentary on 27 February.

Fubon Bank (China) has the economies of scale to get more traction out of UOB’s retail banking franchise, S&P said.

“If acquired, the unit may add close to 10% to Fubon Bank China's retail loan book, based on 2023 numbers,” S&P said.

Fubon Bank (China) can also cross-sell its wealth management products to a bigger retail clientele and increase its revenue streams.

Fubon’s last acquisitions was Citigroup's mortgage business in 2023 and credit card receivables business in 2024.

The acquisitions will have a limited impact on Fubon Bank’s credit profile. It also maintains a sufficient capital buffer. The bank had a Tier 1 capital ratio of 12.9% as of end-September 2024.