Singapore’s UOB widens Indonesian operations

It's part of plans to double lending.

United Overseas Bank said the new advisory unit in Jakarta is part of its plans to double its lending to companies wanting to enter Indonesia for the first time.

UOB’s new advisory unit in Jakarta is the fourth bank that has opened since late 2011, when it created its first in Singapore. The others are in Kuala Lumpur, Bangkok and Shanghai. UOB is one of Singapore’s three largest banks by assets.

Last year, UOB saw an increase of 23% in the value of its loans to Chinese companies in Southeast Asia, contributing 25% of its total cross-border loan portfolio from only 3% in 2010.

Analysts said UOB’s move was a sign of how the bank is trying to exploit its Chinese roots in the region to seize business from a new wave of Chinese companies spreading across Southeast Asia.

In particular, big state-owned Chinese companies have been active in the region for years. Many are using Singapore as a regional base from which to expand in the region, setting up holding companies to take advantage of double-taxation arrangements that Singapore has with other countries in the Association of Southeast Asian Nations (ASEAN).