UOB reports stable growth, deploys new payoff structures

United Overseas Bank (UOB) is working on a new suite of payoffs for its retail structured products after the business ended 2022 with stable traded notional despite the equity market correction.

showed that almost 50% of investors are looking at capital appreciation alongside two other options – capital preservation and income generation.

“It shows that investors’ willingness to take opportunities has improved from 2022,” said Lau.

Year-on-year, the bank saw “insignificant change” in terms of traded notional of structured products, which comprise structured notes, structured deposits and UOB’s equity portfolio.

2020 [which] is focusing on new-towealth and new-to-product customer growth.”

In 2022, equity underliers accounted for 15% to 20% of the total structured products traded notional, a significant fall from the 90% commonly seen in prior years.

“FX and interest rates were almost equally split, together making up the majority of the volume, with the remaining coming from credit or indexlinked solutions,” he said.

One of the payoffs developed by the bank is a vanilla ‘trading discipline strategy’ that corresponds with the bank’s Q1 investment theme ‘get paid while you wait’.

“It allows investors to earn an income on the principal, which is systemically unlocked and participates as the market corrects,” John Lau (pictured), head of wealth management, treasury at UOB, told SRP. “It’s a dollar cost averaging plus income strategy and was launched in late January.”

The Singaporean bank is also seeking to tweak product parameters - from a worst-of option to average in terms of knock-out or to a best-of option, in order to better manage downside risks.

“In 2023, we [have] noticed some changes even as the defensive and funding play is still going on - customer investment sentiment has also started to shift.” said Lau.

At an investment forum UOB held for its clients in early January, a poll