(a) Assess the differences between a commercial bank and an investment bank.

(7 marks)

my answer for part a

The key difference between commercial bank and investment bank are specified below:

Commercial Bank is a bank that set up to provide banking services to the general public. On the other hand, an investment bank established to provide investment and advisory services to the companies.

Commercial bank provides standardized services such as deposits, loans and payment on standing order while investment bank provides customer specific services such as brokerage services and underwriting of securities.

The customer base of a commercial bank is relatively larger than an investment bank.

Commercial bank rate of interest charged is associated with nation?s economic growth and credit demand whereas investment bank is associated with the performance of financial market.

Commercial is a capitalist to all citizens of the country the investment bank is a capitalist to individual, corporations and government.

Commercial bank generates its income from interest income and fees. Unlike an investment bank, which generates income from fees and commissions or profit on trading activities.

(b) Download the 2015 annual report of UOB and Morgan Stanley UK at the links below. Show how the differences established in part (a) are reflected in their respective balance sheets and income statements.

Please help me for part b using m answer in part a.

you may refer to the balance sheet and income statement of the 2 banks. Urgent!!

Registered number: 2068222 Registered office: 25 Cabot Square Canary Wharf London United Kingdom E14 4QA MORGAN STANLEY & CO. INTERNATIONAL plc Report and financial statements 31 December 2015 MORGAN STANLEY & CO. INTERNATIONAL plc CONTENTS PAGE Strategic report 1 Directors' report 15 Independent auditor's report 19 Consolidated income statement 21 Consolidated statement of comprehensive income 22 Consolidated statement of changes in equity 23 Consolidated statement of financial position 24 Consolidated statement of cash flows 25 Notes to the consolidated financial statements 26 Company statement of comprehensive income 118 Company statement of changes in equity 119 Company statement of financial position 120 Notes to the company financial statements 121 Appendix to the financial statements 159 MORGAN STANLEY & CO. INTERNATIONAL plc STRATEGIC REPORT The Directors present their Strategic report for Morgan Stanley & Co. International plc (the \"Company\") and all of its subsidiary undertakings (together \"the Group\") for the year ended 31 December 2015. PRINCIPAL ACTIVITY The principal activity of the Group is the provision of financial services to corporations, governments and financial institutions. The Company operates branches in the Dubai International Financial Centre, France, the Netherlands, Poland, the Qatar Financial Centre, South Korea and Switzerland. There have not been any changes in the Group's principal activity during the year and no significant change in the Group's principal activity is expected. During the year the Institutional Securities business of Morgan Stanley Securities Limited (\"MSSL\"), a Morgan Stanley Group undertaking incorporated in the United Kingdom (\"UK\"), was transferred to the Group, with completion on 31 May 2015. This transferred business has had a positive impact on the Group's net profit after tax for the year. Further details are provided within the business review section below. In addition, on 1 November 2015, Morgan Stanley completed the sale of the global oil merchanting unit of its commodities division to Castleton Commodities International LLC. As part of this transaction the oil merchanting unit operated within the Group was sold, resulting in the Group recognising a $42 million charge relating to the cost to sell the business (see note 15). The Group's ultimate parent undertaking and controlling entity is Morgan Stanley, which, together with the Group and Morgan Stanley's other subsidiary undertakings, form the \"Morgan Stanley Group\". The Morgan Stanley Group is a global financial services firm that maintains significant market positions in each of its business segments: Institutional Securities, Wealth Management and Investment Management. The Morgan Stanley Group provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. As a key contributor to the execution of the Morgan Stanley Group's Institutional Securities strategy in Europe, the Middle East and Africa (\"EMEA\"), the Group provides capital raising; financial advisory services, including advice on mergers and acquisitions, restructurings, real estate and project finance; corporate lending; sales, trading, financing and market-making activities in equity and fixed income securities and related products, including foreign exchange and commodities; and investment activities. REGULATION The Company is authorised by the Prudential Regulation Authority (\"PRA\") and regulated by the Financial Conduct Authority (\"FCA\") and the PRA. In addition, the Company is a registered swap dealer and is regulated by the US Commodity Futures Trading Commission. BUSINESS REVIEW Global market and economic conditions During the first half of 2015, global growth was supported by a rebound in the US and firmer growth in the eurozone and the UK economies, partially offset by sluggishness in major emerging market economies. During the second half of 2015, global growth slowed as a result of the continued sluggishness of emerging market economies, declines in energy prices, and the slowdown of China's economic growth. Global real gross domestic product growth decelerated in 2015 from 2014. Growth in emerging market economies slowed for a fourth straight year, while growth in developed market economies was steady but sluggish. Notable trends during the year included falling oil and other commodity prices, an appreciating US dollar weighing on global trade flows and increasing policy challenges in a number of major emerging market economies, most notably China. The US Federal Reserve announced a rate increase in December 2015 based on cumulative labour market progress and rising confidence in achieving its inflation target. However, with Europe and Japan still struggling and China decelerating, the European Central Bank (\"ECB\"), the Bank of Japan and the People's Bank of China acted to continue their targeted monetary policy easing measures. 1 MORGAN STANLEY & CO. INTERNATIONAL plc STRATEGIC REPORT BUSINESS REVIEW (CONTINUED) Global market and economic conditions (continued) Subsequent to 31 December 2015, the Bank of Japan announced a program of Quantitative and Qualitative Monetary Easing (\"QE\") with a negative interest rate that introduced a three tier policy rate system for bank reserves with a low rate of negative 0.1%. Additionally, in March 2016 the ECB announced a further QE program and reduced interest rates with the deposit facility rate falling from negative 0.3% to negative 0.4% and the benchmark interest rate falling from 0.05% to zero%. Overview of 2015 Financial Results The consolidated income statement for the year is set out on page 21. The Group reported a profit after tax for the year of $401 million, compared to a loss after tax of $713 million for the year ended 31 December 2014 as a result of increased revenues and reduced expenses. The Group's revenues are best reviewed across the aggregate of 'Net gains on financial instruments classified as held for trading', 'Net gains on financial instruments designated at fair value through profit or loss', 'Net gains on available-for-sale financial assets', 'Interest income', 'Interest expense' and 'Other income' (\"aggregate revenues\"). Aggregate revenues for the year increased by 15% to $4,451 million compared to $3,881 million in 2014. The increase in aggregate revenues was primarily driven by increased sales and trading revenues in both the equities and fixed income and commodities divisions. Equity sales and trading revenues increased during the year compared to 2014 partially due to the transfer of the MSSL business to the Group during the first half of the year resulting in increased cash equities and prime brokerage revenues. Prime brokerage revenues further strengthened as a result of increased client activity. Fixed income and commodities sales and trading revenues increased during the year compared to 2014 with key drivers of the increase being a charge of $273 million in 2014 related to the implementation of Funding Valuation Adjustments (\"FVA\") and increased oil related commodities revenues. Interest rate product revenues also increased during the year due to increased client activity and volatility, resulting from QE measures announced by the ECB in January 2015, which improved the operating environment. These increases were partially offset by reduced credit and securitised products revenues. Aggregate revenues for the year exclude net day one gains of $43 million (2014: $26 million) not recognised upon initial recognition of financial instruments measured at fair value where valuation techniques include unobservable market data (see note 32 (e)). Other expense decreased by 18% from $4,558 million in 2014 to $3,741 million in 2015 split between decreases in staff related costs of 27% from $2,414 million in 2014 to $1,774 million in 2015 and in nonstaff related expenses of 8% from $2,144 million in 2014 to $1,967 million in 2015. The decrease in both staff costs borne directly by the Group and through management recharges from other Group undertakings was driven by the impact in 2014 of a decrease in the average deferral rate for discretionary incentive compensation awards and the acceleration of vesting for certain outstanding cash based incentive compensation awards (see note 7). The decrease in non-staff related expenses is mainly due to reduced 'management charges from other Morgan Stanley Group undertakings related to other services' as a result of certain UK incorporated Morgan Stanley Group undertakings implementing the new UK accounting framework and due to adjustments relating to prior periods made in 2014 which resulted in higher recharged expenses in 2014. Partially offsetting these drivers of reduced expense in 2015 was the impact of transferring MSSL's business to the Group in the first half of the year, which increased the expense base of the Group. 2 MORGAN STANLEY & CO. INTERNATIONAL plc STRATEGIC REPORT BUSINESS REVIEW (CONTINUED) Overview of 2015 Financial Results (continued) The Group incurred a tax expense of $309 million (2014: $36 million). This represents an effective tax rate of 43.5%, which is higher than the average standard rate of UK corporation tax of 20.25%. A key driver of the higher effective tax rate is the impact of adjustments in respect of prior years, as shown in note 8. These prior year adjustments include a provision against certain withholding tax reclaim balances. The Group's total assets and liabilities decreased by $54,442 million and $54,781 million respectively, a decrease of 12% and 13% respectively as at 31 December 2015 when compared to the total assets and total liabilities as at 31 December 2014. The decrease in total assets and total liabilities is driven by decreases in financial assets classified as held for trading of $49,125 million and in financial liabilities classified as held for trading of $41,322 million and a decrease in securities sold under agreements to repurchase of $7,900 million. The decreases in financial assets classified as held for trading and financial liabilities classified as held for trading were mainly due to decreases in derivative assets and liabilities. Fixed income derivative assets and liabilities fell by $41,174 million and $42,778 million respectively with the biggest decrease being with respect to interest rate contracts, which fell mainly due to interest rate movements and efficiencies in the management of intercompany balances (see note 12). The consolidated statement of cash flows presented on page 25 shows a net increase in cash of $96 million during the year (2014: net decrease of $491 million). Net cash inflows from operating activities were $246 million (2014: $1,578 million net cash outflow), offset by net cash outflows from financing activities of $149 million (2014: $1,074 million net cash inflow). Key performance indicators The Board of directors monitors the results of the Group by reference to a range of performance and risk based metrics, including, but not limited to, the following: Profitability metrics Operating margin: The Group's operating margin (defined as net profit/ loss before tax as a percentage of aggregate revenues) was 16.0% (2014: negative 17.4%). Return on equity: The Group's return on equity (profit/ loss for the year as a percentage of total equity at the beginning of the year) was 2.5% (2014: negative 4.6%) Return on assets: The Group's return on assets (profit/ loss for the year as a percentage of total assets at the beginning of the year) was 0.1% (2014: negative 0.2%). Balance sheet assets Total assets: Total assets of the Group continue to be closely monitored. The Group's total assets, as disclosed on page 24, decreased by 12% to $394 billion at 31 December 2015. Capital The Group monitors its, and the Company's capital position against a range of key metrics including the following: Tier 1 regulatory capital: The Company's Tier 1 capital as calculated in accordance with PRA rules which are based on the fourth European Union (\"EU\") Capital Requirements Directive and EU Capital Requirements Regulation (\"CRR\"), collectively known as \"CRD IV\UNITED OVERSEAS BANK LIMITED Annual Report 2015 Room Isabelle Soh Min Hui About This Report Contents At United Overseas Bank Limited (UOB), we recognise that transparency is key to stakeholder engagement and the reporting of both financial and non-financial performance allows us to communicate how we create value for all of our stakeholders. Overview This is why we have intended for the UOB Annual Report 2015 to show the connectivity and interdependencies present across our organisation, in accordance with the tenets of the International Integrated Reporting Council's Integrated Reporting Framework. This report and more information on UOB are available on www.uobgroup.com/AR2015. 02 04 06 08 10 13 14 15 19 24 About United Overseas Bank Limited Our Story Over 80 Years Creating Long-term Value Across Our Franchise Our Strategic Priorities Financial Highlights Chairman Emeritus' Statement Chairman's Statement Deputy Chairman and CEO's Report Board of Directors Group Management Committee Year in Review 27 Customers Group\tRetail Group holesale anking Global\tMarkets\tand\tInvestment\tManagement 51 People 60 Community 66 Investors 69 Regulators 70 Our Awards and Accolades in 2015 Governance 74 86 91 103 106 Corporate Governance Remuneration Risk Management Capital Management Pillar 3 Quantitative Disclosure Financial Report 114 125 Management Discussion and Analysis Financial Statements Directors'\tStatement Independent\tAuditor's\tReport Income\tStatements Statements\tof\tComprehensive\tIncome alance\tSheets Statements\tof\tChanges\tin\tEquity Consolidated\tCash\tFlow\tStatement otes\tto\tthe\tFinancial\tStatements Investor Reference 222 Statistics of Shareholdings 224 Five-Year Ordinary Share Capital Summary 225 Our\tInternational etwork 229 otice\tof\tAnnual\tGeneral\tMeeting Proxy Form Corporate\tInformation All figures in this Annual Report are in Singapore dollars unless otherwise specified. Room by Isabelle Soh Min Hui Oil and acrylic 76.0 x 102.0 cm Ms Isabelle Soh Min Hui's Room is the design inspiration for the cover of this year's Annual Report. The painting received the Gold Award for the Emerging Artist Category in the 2015 UOB Painting of the Year (Singapore) Competition.\tIt\tis\tinspired\tby\tMs\tSoh's\tphilosophy\tthat\t\"a\troom\tis\tnot\ta\troom until you make it one\". The artist creates a surreal world that defies the physical confines of a room. It\tcompels\tthe\tviewer\tto\tleave\tthe\tpredictable\tbehind\tand\tto\tpush\tbeyond the\tboundaries\tof\tone's\timagination.\tIn\tnot\tallowing\tthe\tmind\tto\tbe\tboxed\tin, we leave the door open for new possibilities. The UOB Painting of the Year Competition, now in its 34th year, promotes awareness and appreciation of art, and challenges artists to produce works that inspire audiences across Southeast Asia. UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 | 1 About United Overseas Bank Limited Who We Are United Overseas Bank Limited (UOB) is a leading bank in Asia with a global network of more than 500 branches and offices in 19 countries and territories in Asia Pacific, Europe and North\tAmerica.\tIn\tAsia,\twe\toperate\tthrough\tour\thead\toffice\tin Singapore\tand\tbanking\tsubsidiaries\tin\tChina,\tIndonesia,\tMalaysia and Thailand, as well as branches and offices. In\t1935,\tamid\tthe\teconomic\tuncertainties\tfollowing\tthe\tGreat Depression, UOB opened its doors to offer banking services for the merchant community in Singapore. Since then, UOB has grown organically and through a series of strategic\tacquisitions.\tToday,\tUOB\tis\trated\tamong\tthe\tworld's top banks: 'Aa1' by Moody's and 'AA-' by Standard & Poor's and Fitch Ratings. Generations of UOB employees for the past 80 years have carried through the entrepreneurial spirit, focus on long-term value creation and an unwavering commitment to do what is right for our customers and our colleagues. At UOB, we believe in being a responsible financial services provider and we are committed to making a difference in the lives of our stakeholders and in the communities in which we operate. Just\tas\twe\tare\tdedicated\tto\thelping\tour\tcustomers\tmanage\ttheir finances wisely and grow their businesses, UOB is steadfast in our support of social development, particularly in the areas of art, children and education. What We Do UOB provides a wide range of financial services globally through our\tthree\tbusiness\tsegments\t-\tGroup\tRetail,\tGroup\tWholesale Banking,\tand\tGlobal\tMarkets\tand\tInvestment\tManagement.\tOur offering includes personal financial services, private banking, 2 | UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 business banking, commercial and corporate banking, transaction banking, investment banking, corporate finance, capital market activities, treasury services, brokerage and clearing services, asset management, venture capital management and insurance. Where We Operate >500 branches and offices Asia Pacific, Europe and North America Canada 3 USA 3 United Kingdom 1 Myanmar 2 Thailand 157 Vietnam 1 France 1 China 22 Japan 2 South Korea 1 Taiwan 4 Hong Kong 3 India 2 Malaysia 47 Singapore 74 Indonesia 190 Brunei 2 Philippines 1 Australia 4 UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 | 3 Our Story Over 80 Years Since 1935, our entrepreneurial spirit, focus on long-term value creation, and unwavering commitment to do what is right for our customers, have made UOB a leading bank in Asia. Our timeline captures the corporate milestones of our 80-year history. 1974 UOB Group begins operating from its new 30-storey building which stood on the same site as Bonham Building (the current UOB Plaza 2) 1975 Opens London branch 1977 Opens\tNew\tYork\tagency 1978 Our Beginning 1935 Amid the uncertainties of the Great Depression, a group of seven businessmen led by Datuk\tWee\tKheng\tChiang\t(first\trow,\tfifth\tfrom\tleft)\tfounded\ta\tbank\tto\tserve\tthe\tmerchant community in Singapore. UOB Bullion Limited commences operations and introduces Gold Certificates 1980 Opens Singapore's 1st ATM offering 24-hour banking Opens Los Angeles agency 1930s 1935 (6 August) United Chinese Bank (UCB) is incorporated 1960s 1970s - 1990s 1962 1st bank to focus on women as customers 1965 1982 Holds inaugural UOB Painting of the Year competition UCB is renamed United Overseas Bank 1935 (1 October) UCB begins operations at Bonham building Opens 1st\toverseas\tbranch\tin\tHong\tKong 1971 Acquires\tmajority\tstake\tin\tChung\tKhiaw Bank\t(CKB) Opens Tokyo Branch Reveals iconic five-bar logo 1956 | Opens\tBeijing\trepresentative\toffice Acquires\tmajority\tinterest\tin\tFar\tEastern\tBank 1985 Expands into Vancouver Drives 1st mobile branch 4 1984 1986 1958 Opens 1st UCB branch at Beach Road Opens Seoul representative office Expands into Sydney and Xiamen Introduces\tcoin\tbanks\tfor\tchildren 1959 1983 1973 Acquires\tLee\tWah\tBank UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 1987 Acquires\tmajority\tinterest\tin\tIndustrial\t& Commercial Bank 2007 1988 Launches 1st\tUOB\tHeartbeat\tRun/Walk 1st local bank to launch Visa cards 1st bank to launch Singapore's only credit card for ladies 2009 1992 2010 1st Singapore bank to set up office in Vietnam Opens Mumbai branch Merges\tPT\tBank\tUOB\tIndonesia\twith PT Bank UOB Buana 1993 2011 1 bank in Singapore to launch automated Cash Deposit Machine Receives Distinguished Patron of the Arts Award for 11th consecutive year and SG50 Arts Patron Award Opens the UOB Southeast Asia Gallery at National\tGallery\tSingapore\twhich\thouses the world's largest collection of modern Southeast Asian art Sets up Taipei representative office st 2015 1st bank in Singapore to establish a Foreign Direct\tInvestment\tAdvisory\tUnit\tto support our clients' regional expansion Introduces\tUOB\tMighty\t-\t1st mobile app outside of the US to enable contactless payments with tokenised security Source: Singapore Business Times Singapore Press Holdings Limited. Reprinted with permission. 2015 2000s - 2010s 1994 Expands into Yangon 1995 Celebrates 60th anniversary and official opening of UOB Plaza 1 2013 Completes\tfull\tacquisition\tof\tFar\tEastern\tBank 1st bank in Singapore to offer retail customers online access to gold and silver savings accounts Officially opens Yangon branch, adding to UOB's unparalleled Southeast Asian network 2014 Named\tMost\tAdmired\tASEAN Enterprise\tfor ASEAN\tCentricity\tby ASEAN\tBusiness\tAdvisory\tCouncil 1st Asian bank to obtain a Eurex General Clearing Membership UOB turns 80 1997 UOB\tMalaysia\tmerges\twith\tCKB\tMalaysia 1998 Opens Shanghai branch 1999 Acquires\tWestmont\tBank\tin\tthe\tPhilippines Acquires\tRadanasin\tBank\tin\tThailand 2001 Acquires\tOverseas\tUnion\tBank 2004 Acquires\t96.1%\tin\tBank\tof\tAsia\tPublic Company in Thailand 2005 Increases\tcontrolling\tstake\tof\tPT\tBank\tBuana in\tIndonesia\tto\t61.1% UOB is rated among the world's top banks and has a global network of more than 500 branches and offices. UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 | 5 Creating Long-term Value Across Our Franchise UOB is committed to achieving sustainable and stable growth that creates long-term value across our franchise. Our prudent and disciplined approach to banking is guided by our values of honour, enterprise, unity and commitment. Our Values Our time-tested values shape our thinking and behaviour. Honourable We act prudently to fuel our customers' success and maintain the highest standards in all we do. Our Fundamentals These strengths distinguish UOB within the industry and when combined, make us unique. Asian heritage and Southeast Asian roots Our Asian perspective, honed over time, gives us a strong appreciation of what is unique to ASEAN, and the needs of our customers and their businesses. Established and integrated network Our integrated and unparalleled Southeast Asian network and extensive global presence allow us to provide a consistent quality of experience. Enterprising Deep pool of talent and experience We possess a forwardlooking mindset and provide deep insight, taking the initiative to find solutions. Our people are widely recognised for their experience and expertise. We are steadfast in nurturing relationships with customers and with our colleagues across generations. Strong credit ratings, capital and funding base United We reach our corporate and individual goals through cooperation, mutual respect and loyalty. Committed We hold ourselves accountable for ensuring that UOB remains a source of stability, security and strength. Our disciplined and measured approach in maintaining a robust capital position and strong balance sheet has consistently earned us top credit ratings. Robust risk management and corporate governance Our commitment to good governance and informed risk decision-making enables us to grow sustainably. Our Customerfocused Business We draw upon our expertise for the benefit of our customers, focusing on what is relevant to their personal or business needs. Group Retail Our strong customer relationships are founded on our intimate understanding of who they are, what they hold precious and what influences their lives. We focus on their financial present and future. To help them reach their goals, we offer a purposeful and broad range of products and services that help them plan, save, spend and invest wisely. We do so in ways that best suit their lifestyles and preferences. Our Purpose We harness the strength of our fundamentals and draw upon our experience and expertise in support of our customers wherever they are. We help our customers grow their wealth, manage their businesses and seize opportunities across the region with purposeful financial solutions and insightful advisory. Our strength and stability mean that our stakeholders can count on us through economic cycles. We appreciate the importance of deep relationships and remain committed to the progress of the economies and communities in which we operate. In this way, we create value for all our stakeholders - now and for the future. Our Expertise We build on our fundamentals to provide solutions with the right balance of prudence and enterprise for our customers. Deep in-country knowledge Our understanding of each local business environment enables us to help our customers manage their finances, from simple to complex, and within and across borders. Seamless connectivity Our network connects our customers across Southeast Asia and to the rest of world. Combined with our in-country expertise and astute market insights, we are best-positioned to help our customers unlock the region's potential. Dedicated professionals Led by the vision and experience of our leadership, our high-calibre people are committed to advise and to act in the best interests of our customers. We are there for them when it matters, just as we are for our colleagues. Dependability for the long term Our financial stability enables us to be agile in responding to our customers' needs through changing economic cycles and to seize opportunities as they arise. Sound and sustainable model Our sound risk management and governance culture ensures that we always provide appropriate solutions for our customers that best suit their needs and our risk appetite. 92% of colleagues in our key markets are local >500 branches and offices across our key regional markets 30 years of industry experience our senior management have on average 11.7% Our Value Creation Investors Serving the long-term interests of our investors by delivering stable and sustainable returns. 5% five-year total annualised shareholder return People Building meaningful careers and nurturing people as we develop deeper relationships with customers. 15% of employees promoted proforma Common Equity Tier 1 Capital Adequacy Ratio Community 142% Making a difference in the lives of our stakeholders and the communities in which we operate. total Liquidity Coverage Ratio (average quarterto-date) Group Wholesale Banking and Global Markets and Investment Management Our deep client relationships are based on the premise that we care for our clients' businesses as if they were our own. We offer the experience and expertise from across the Group to provide them with comprehensive and customised banking and financial risk management services. Through our seamless, cross-border banking solutions and on-the-ground coverage, we support our clients as they manage and expand their businesses across Asia. >23,500 employee hours spent on community initiatives Regulators Complying with regulations and being a responsible member of the financial services industry. Our Strategic Priorities Capitalising on Regional Growth Drivers Asian trends dictate increasing demand for innovative financial solutions for consumers and businesses Our priorities Market expectations of rising interest rates due to the end of\tquantitative\teasing\tin\tthe\tUS,\tdepressed\tcommodity prices and China's economic slowdown resulted in a muted global economy in 2015. The outlook for 2016 is austere. But\tAsia\tremains\ta\tbright\tspot.\tIts\texpanding\tpopulation, increasing urbanisation and rising affluence create greater consumption and demand for goods and services in the region. These trends will continue to spur interest in, and the pursuit of, innovative personal banking solutions as consumers save, spend, invest and plan in accordance with their lifestyles. Serving the financial needs of consumers Trade and investment flows in Asia will continue to grow to support the demand for goods and services. Facilitating both inter- and intra-regional trade are the free trade agreements and government-level initiatives such as the\tASEAN\tEconomic\tCommunity,\tOne\tBelt\tOne\tRoad, Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, which will lower trade barriers and also boost foreign direct investments. The emerging economies and infrastructural development in the region also present opportunities to businesses seeking to expand their local and cross-border operations. To ride on these trade and investment trends, to manage potential risks and to sustain growth, businesses will continue to seek a wide range of financial solutions that meet their needs. Supporting companies as they manage and expand their businesses within and across borders Helping\tcustomers\tsafeguard\ttheir\tassets\tand gain greater yield; Ensuring that our customers benefit from programmes designed to suit their lifestyles and ambitions; and Growing our customers' wealth for the next generation. Helping\tbusinesses\trealise\ttheir\tpotential\tand seize opportunities across Asia; Partnering\tfinancial\tinstitutions\tas\tthey\tgrow\tin Asia; and Creating value for our clients by providing working\tcapital,\tfinancing,\tcash\tflow\tand\tliquidity solutions, and advisory services. Balancing Growth with Stability More stringent requirements for banks amid evolving regulatory frameworks The global banking sector in recent years has seen the tightening of balance sheets and underwriting standards, as banks strive to control credit exposure and to improve their asset-liability mix amid interest rate and currency risks. Regulatory frameworks continue to evolve as central banks seek to ensure financial stability and effective corporate governance. Among which, the Basel III framework requires banks to build up higher capital and\tliquidity\tlevels\tin\torder\tto\twithstand\tpotential\trisks\tand\tshocks. 8 | UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 Investing in Enablers to Support Business Growth Expertise remains core to the banking industry which is being shaped by technological advances Our priorities The advancement of technology and digitalisation has over the last decade changed the way people live their lives. Banking transactions are increasingly made online and on mobile devices. Innovation in financial technology is shaping how traditional banks engage their customers. With more services - from loans to payments - going digital, banks are tapping on data analytics to provide customers with a personalised experience. The\tubiquity\tof\tmobile\tdevices also\tcalls for tighter cyber security and more robust processes and systems. Making banking simpler and safer for our customers with the use of technology As the financial industry continues to evolve and open up to more non-traditional players, banks have to ensure their relevance and distinctiveness to their customers as they seek sustainable business growth. Core to this are the\tquality\tand\texpertise\tof\tthe\tpeople\tin\tan\torganisation. Nurturing our people and building meaningful careers Providing\tour\tcustomers\twith\tan\tintuitive\tand seamless experience across different touch points and geographies; Using\tfinancial\ttechnology\tto\tcreate\tinnovative banking solutions for consumers and businesses; and Enhancing\tour\tmonitoring\tand\trisk\tsystems\tto\tmaintain a secure banking environment for our customers. Nurturing\ta\tculture\tof\tinnovative\tand\tentrepreneurial thinking to stay competitive in a fast-changing banking landscape; Investing\tin\ttraining\tand\tcareer\tdevelopment\tso our people have the insight and agility to seize the opportunities before them; and Ensuring\tour\tpeople\tuphold\tthe\thighest\tprofessional and moral standards through organisational policies, practices and processes. Our priorities Ensuring continued financial strength, high governance standards and sustainable business practices to create value for all our stakeholders Broadening\tfunding\tsources\tand\tdiversifying\tinvestor\tbase; Maintaining\trobust\tcapital\tand\trisk\tmanagement\tsystems\tand\tprocesses; Preserving\tstrong\tcapital\tadequacy\tlevels\tto\tsupport\tbusiness\tgrowth\tin\ta\tprudent\tand\tdisciplined\tmanner;\tand Upholding\tthe\thighest\tprofessional\tand\tmoral\tstandards\tto\tdo\twhat\tis\tright\tfor\tall\tour\tstakeholders. UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 | 9 Financial Highlights We achieved steady income growth, and maintained a resilient balance sheet and strong capital position. Total Income 35.5% 2,021 39.7% 38.7% 2,578 2,600 3,678 3,917 4,120 2011 2012 2013 Net interest income ($ million) 2,803 2,327 2011 2012 2013 3,122 2,900 4,926 4,558 2014 Non-interest income ($ million) 3,008 38.8% 38.9% 2015 Non-interest income/Total income (%) 3,249 3,209 2014 Total income grew 7.9% to reach $8.05 billion, led by a broad-based increase in core income and higher gains on sale of investment securities. $8,048 million + 7.9% Net\tinterest\tincome\tgrew\t8.1%\tto\t$4.93\tbillion,\tdriven\tby\thealthy loan\tgrowth\tand\timproved\tnet\tinterest\tmargin.\tNet\tinterest margin\tincreased\t6\tbasis\tpoints\tto\t1.77%,\tbenefiting\tfrom\trising short-term interest rates in Singapore. Non-interest\tincome\trose\t7.7%\tto\t$3.12\tbillion\tin\t2015.\tFee\tincome grew\t7.7%\tto\t$1.88\tbillion\twith\tcredit\tcard,\tfund\tmanagement\tand wealth management activities registering steady growth. Trading and\tinvestment\tincome\tincreased\t16.8%\tto\t$954\tmillion\tdue\tto higher gains on sale of securities as well as healthy growth in treasury customer income. Net Profit After Tax The\tGroup\treported\tnet\tprofit\tafter\ttax\tof\t$3.21\tbillion\tfor 2015,\ta\tmarginal\t1.2%\tlower\tfrom\ta\tyear\tago\tas\tprior\tyear\tresults included a higher write-back of tax provisions. $3,209 million - 1.2% 2015 Net profit after tax ($ million) Customer Loans/Deposits 84.0% 83.3% 141 153 169 182 83.4% 179 215 84.7% 83.8% 234 196 241 204 Net\tloans\tregistered\ta\tbroad-based\tincrease\tof\t3.9%\tfrom\ta year\tago\tto\t$204\tbillion\tin\t2015. Customer\tdeposits\tgrew\t2.9%\tto\t$241\tbillion,\tmainly\tled\tby growth in Singapore dollar and US dollar deposits. The Group's funding position continued to be strong with loan-to-deposit\tratio\tat\t84.7%\tin\t2015. 2011 2012 Loans ($ billion) 2013 2014 Deposits ($ billion) 2015 Loan/Deposit ratio (%) Note:\tNet\tloans\twere\tnet\tof\ttotal\tallowances. From 2013, customer deposits include deposits from financial institutions relating to fund management and operating accounts. Previously, these deposits were classified\tas\t\"Deposits\tand\tbalances\tof\tbanks\". Loans By Geography $ billion 2015 Singapore 116.1 Malaysia 24.6 Thailand 11.5 Indonesia 10 | 11.5 Greater China 25.2 Others 18.4 Gross\tloans\tgrew\t4.0%\tyear-on-year\tto\t$207\tbillion\tin\t2015. In\tconstant\tcurrency\tterms,\tthe\tunderlying\tloan\tgrowth\twas\t5.4%. Singapore,\twhich\taccounted\tfor\t56%\tof\tGroup\tloan\tbase, registered\t5.8%\tgrowth\tyear-on-year\tto\treach\t$116\tbillion\twhile loans\toutside\tSingapore\tgrew\t1.8%. Note:\tLoans\tby\tgeography\tis\tclassified\taccording\tto\twhere\tcredit\trisks\treside, largely represented by the borrower's country of incorporation/operation (for non-individuals) and residence (for individuals). UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 Customer Loans $204 billion + 3.9% Customer Deposits $241 billion + 2.9% Loan/Deposit ratio 84.7 % + 0.9% pt $207 billion + 4.0% Shareholders' Equity/Return on Equity 11.1% 23.0 12.4% 25.1 12.3% 12.3% 26.4 29.6 11.0% 30.8 Shareholders' equity increased 4.1% from a year ago to $30.8\tbillion\tas\tat\t31\tDecember\t2015,\tlargely\tcontributed\tby\tnet profits and improved valuations on available-for-sale investments. Return\ton\tequity\twas\t11.0%\tfor\t2015. Shareholders' Equity $31 billion + 4.1% Return on Equity 11.0 % - 1.3% pt 2011 2012 2013 Shareholders' equity ($ billion) 2014 2015 Return on equity (%) Total Assets/Return on Assets 1.06% 237 1.18% 253 1.12% 1.10% 1.03% 284 307 316 The\tGroup's\ttotal\tassets\tgrew\t3.0%\tto\t$316\tbillion\tin\t2015\tmainly on higher loan volume. Total Assets Return\ton\tassets\tfor\t2015\twas\t1.03%. + 3.0% $316 billion Return on Assets 1.03 % - 0.07% pt 2011 2012 Total assets ($ billion) 2013 2014 2015 Return on assets (%) Capital Adequacy Ratio (CAR) 19.1% 16.7% 13.5% 2011 16.6% 14.7% 13.2% 2012 CET1/Tier 1 CAR (%) 2013 16.9% 15.6% 13.9% 2014 13.0% As at 31 December 2015, the Group's strong capital position remained well above the Monetary Authority of Singapore (MAS)\tminimum\trequirements\twith\tCommon\tEquity\tTier\t1 (CET 1)\tand\tTotal\tCAR\tat\t13.0%\tand\t15.6%\trespectively. Note:\tWith\teffect\tfrom\tJanuary\t2013,\tthe\tGroup\tadopted\tthe\tBasel\tIII\tframework for\tits\tCAR\tcomputation\tin\taccordance\twith\tthe\trevised\tMAS\tNotice\t637\tand CET 1\tis\tmandated\tunder\tMAS\tNotice\t637. 2015 13.0 % - 0.9% pt Total CAR 15.6 % - 1.3% pt Total CAR (%) Overseas Profit Before Tax Contribution 2015 CET 1/Tier 1 CAR Singapore 61.1% Malaysia 13.9% Thailand 4.5% Indonesia 1.6% Greater China 9.5% Others 9.4% The\tGroup's\tnet\tprofit\tbefore\ttax\twas\t1.1%\thigher\tat\t$3.87\tbillion. Singapore\tincreased\t0.8%\tyear-on-year\tto\t$2.36\tbillion\twhile overseas\tgrew\t1.8%,\tdriven\tmainly\tby\tThailand,\tGreater\tChina and overseas branches. 38.9 % + 0.2% pt Overseas\tprofit\tcontribution\twas\thigher\tat\t38.9%\tin\t2015\twhen compared\twith\t38.7%\ta\tyear\tago. UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 | 11 Financial Highlights Five-Year Group Financial Summary Selected Income Statement Items ($ million) Total income Total expenses Operating profit Net\tprofit\tafter\ttax 1 Selected Balance Sheet Items ($ million) Net\tcustomer\tloans Customer deposits 2 Total assets Shareholders'\tequity 1 Financial Indicators (%) Expense/Income\tratio Non-performing\tloans\tratio Return on average total assets Return\ton\taverage\tordinary\tshareholders'\tequity Capital\tadequacy\tratios 3 Common\tEquity\tTier\t1\t/\tTier\t1 Total Per ordinary share Basic\tearnings\t($) Net\tasset\tvalue\t($) Net\tdividend\t(cents) 4 Dividend cover (times) 4 2011 2012 2013 2014 2015 5,699 6,495 6,720 7,457 8,048 2,450 2,747 2,898 3,146 3,597 3,248 3,748 3,822 4,311 4,451 2,327 2,803 3,008 3,249 3,209 141,191 152,930 178,857 195,903 203,611 169,460 182,029 214,548 233,750 240,524 236,958 252,900 284,229 306,736 316,011 22,967 25,080 26,388 29,569 30,768 43.0 42.3 43.1 42.2 44.7 1.4 1.5 1.1 1.2 1.4 1.06 1.18 1.12 1.10 1.03 11.1 12.4 12.3 12.3 11.0 13.5 14.7 13.2 13.9 13.0 16.7 19.1 16.6 16.9 15.6 1.43 1.72 1.84 1.98 1.94 13.23 14.56 15.36 17.09 17.84 60 70 75 75 90 2.47 2.54 2.54 2.70 2.23 1 Relate\tto\tamount\tattributable\tto\tequity\tholders\tof\tthe\tBank. 2 From\t2013,\tcustomer\tdeposits\tinclude\tdeposits\tfrom\tfinancial\tinstitutions\trelating\tto\tfund\tmanagement\tand\toperating\taccounts.\tPreviously,\tthese\tdeposits\twere\tclassified\tas\t\"Deposits and balances of banks\". 3 With\teffect\tfrom\tJanuary\t2013,\tthe\tGroup\tadopted\tthe\tBasel\tIII\tframework\tfor\tits\tcapital\tadequacy\tratio\tcomputation\tin\taccordance\twith\tthe\trevised\tMAS\tNotice\t637\tand\tCommon Equity\tTier\t1\tis\tmandated\tunder\tMAS\tNotice\t637. 4 Included\tspecial\tdividend\tof\t10\tcents\tin\t2012\tand\t5\tcents\tin\t2013\tand\t2014\trespectively.\t2015\tincluded\tUOB's\t80th Anniversary dividend of 20 cents. 12 | UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 Chairman Emeritus' Statement While 2016 looks set to be another difficult year, we continue to see opportunities in adversity. 2015 began on a cautiously optimistic note but ended with disappointment as the persistent slowdown in the global economy was made worse by an unanticipated and severe drop in oil prices. Markets reacted with great volatility as hope turned\tto\tnervousness.\tWhile\t2016\tlooks\tset\tto\tbe\tanother difficult year, we continue to see opportunities in adversity. Our fundamentals are in good stead and our approach has always been with a long-term view. When\tmy\tfather,\tDatuk\tWee\tKheng\tChiang,\tand\this\tbusiness partners opened this bank on 1 October 1935, they were guided by a philosophy built on two pillars - the first is that of being honourable to our customers and to our colleagues. Honour and integrity must never be compromised in a banker. The second is that of always placing the right persons in the right positions.\tThis\tphilosophy,\twhich\tI\tembraced,\thas\tsince\tbeen embedded\tin\tUOB\tand\thas\tguided\tour\tprogress.\tWe\treaffirmed its significance as we celebrated our 80th anniversary in 2015. Even as the banking landscape and the regulations governing it become more complex over time, UOB's approach will remain unchanged in taking us forward. I\twish\tto\tthank\tall\tour\tloyal\tcustomers\tfor\ttheir\tgenerations\tof support and our management and employees for upholding UOB's values as they serve and support our customers. Wee Cho Yaw Chairman Emeritus and Adviser February 2016 UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 | 13 Chairman's Statement It is at times such as these that UOB's innate conservatism plays to its advantage. The year in review 2015 was marked by tumbling oil prices, sliding Asian markets, sharp depreciation of regional currencies against the US dollar and\tanxiety\tover\tChina's\teconomic\tslowdown.\tIt\tis\tat\ttimes\tsuch as these that UOB's innate conservatism plays to its advantage. For in periods of heady growth we are not the first to dash out of the starting\tblocks\tin\ta\trace\tfor\tprofit.\tWe\tprefer\tto\tmaintain\ta\tsteady footing. This measured approach enables us to stand on firmer ground and to withstand the turbulence that we are facing now. Given a year of uncertainties, we as a Board are satisfied with our performance.\tUOB\trecorded\tan\toperating\tprofit\tof\t$4.45\tbillion,\tup 3.2\tper\tcent\tover\t2014.\tNet\tprofit\tafter\ttax\theld\trelatively\tsteady at\t$3.21\tbillion\tfor\t2015. Harnessing our franchise strength Through the challenging environment, we enhanced coverage across our regional footprint, investing in specialist bankers particularly for\tour\tfinancial\tinstitution\tclients.\tWe\talso\tstrengthened\tproduct sales across Transaction Banking and Global Markets. Thus we saw strong\tgrowth\tin\tthe\tFinancial\tInstitutions\tsegment\talong\twith increased cross-selling in cash management and Global Markets products for our corporate clients. Building on the strengths of our regional\tfranchise,\tHong\tKong\twas\tkey\tto\tcapturing\tcross-product and\tcross-geographic\topportunities.\tIts\tstrong\tgrowth\tin\t2015\twas derived from the expansion of our client base there, as well as from the network activities of our clients from China and Southeast Asia operating\tin\tor\tthrough\tHong\tKong. The\tyear\talso\tsaw\tUOB\tcomplete\tits\tcompulsory\tacquisition of Far Eastern Bank making it a wholly-owned subsidiary of UOB.\tThe\tacquisition\tenables\tUOB\tto\thave\tgreater\tcontrol\tand management flexibility to integrate the company's operations for increased efficiencies. I\treferred\tlast\tyear\tto\tdigitisation\topening\tnew\tavenues\tfor\tfinancial institutions\tto\tmeet\tthe\tneeds\tof\tconsumers.\tIn\t2015,\twe\tcontinued to strengthen and to extend the digital experience through our products\tand\tservices.\tWe\talso\tset\tup\tThe\tFinLab\tventure\tto explore possibilities with FinTech startups through prototypes in payments and collections, wealth management, big data analytics and risk management. 14 | UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 Ensuring our financial resilience The year ahead will be difficult and so we continue to scour for\tproblems\tthat\tmight\tarise\tin\ttime.\tWe\thave\tbeen\tactively monitoring and stress-testing areas of exposure in China, oil & gas, other commodities and shipping which have been of\tgreatest\tconcern\tlately.\tWe\tas\ta\tBoard\thave\treviewed\tthese vulnerable areas and are satisfied that they are relatively contained. We\thave\tcontinued\tto\tmaintain\ta\tstrong\tcapital\tposition\tand also\tenlarged\tour\tdeposits.\tWe\tfurther\tbroadened\tand\tdiversified our\tinvestor\tand\tfunding\tbase.\tLast\tNovember,\twe\testablished\ta US$8\tbillion\tGlobal\tCovered\tBond\tProgramme\tto\tprovide\tthe Group with access to wholesale funding markets even in periods of extreme market volatility. Our disciplined funding strategy has been central to the Bank's stable growth. The next 80 2015 was a year of much significance to UOB for we celebrated UOB's 80th anniversary and marked our deep commitment to our founding principles of prudence, industry, thrift and vigilance. These principles will continue to guide us and ensure the Group's continued financial soundness as we protect and promote the interests of our stakeholders. I\tam\tpleased\tto\tannounce\tthat\tthe\tBoard\thas\trecommended\ta\tfinal dividend of 35 cents per ordinary share. Together with the one-off 80th Anniversary dividend of 20 cents and interim dividend of 35 cents, this takes the total dividend for 2015 to 90 cents per ordinary share. I\twould\tlike\tto\textend\tmy\tgratitude\tto\tmy\tfellow\tBoard\tmembers, and the CEO and his team, for their efforts in steering UOB forward. On\tbehalf\tof\tthe\tBoard,\tI\tthank\tour\tcolleagues\tfor\ttheir\tdedication in upholding the commitments we make to our customers. And I\tremain\tgrateful\tto\tour\tcustomers\tand\tshareholders\tfor\ttheir continued and loyal support of UOB. Hsieh Fu Hua Chairman February 2016 Deputy Chairman and CEO's Report We will continue to build on our strengths, guided by our time-tested values of honour, enterprise, unity and commitment, and a strong sense of accountability to our stakeholders. Focusing on our fundamentals UOB turned 80 against the backdrop of a challenging global macro-environment in 2015. Through various business cycles, we have grown with and stood by our customers. And we have done so over time by increasingly harnessing the strengths of our fundamentals. These are our Asian heritage and Southeast Asian roots; an established and integrated network; our deep pool of talent and experience; strong balance sheet; and robust risk management. Our fundamentals have enabled our progress over the past eight decades and they have also anchored us when the waters turn choppy. The\tindustry\ttoday\tis\tincreasingly\tcomplex\tand\tvolatile.\tWe\tface an unpredictable environment with structural changes brought on by new technology, increasing connectivity and regulations. Times such as these present opportunities for long-term players, such as UOB, to draw upon its strengths. UOB was founded on 1 October 1935 in the aftermath of the Great Depression. A team of seven businessmen led by Datuk Wee Kheng Chiang saw the need to help enterprise in Singapore grow amid the economic uncertainties. That entrepreneurial spirit and astute business acumen continue to shape our development and position us as a leading regional financial institution, as once again, we find ourselves on the cusp of great change in the banking industry. Our\tjourney\thas\tseen\tmany\tkey\tturning\tpoints\tas\twe\tdeveloped our Asian franchise and presence globally. From our very first overseas\tbranch\topened\tin\tHong\tKong\tin\t1965\tto\tour\tlatest investment in Myanmar, we carefully planned each move as an element of our blue-print to build our pan-regional network. Today, we have a well-established and extensive on-the-ground presence,\tcustomer\tfranchise\tand\tdistribution\tcapabilities.\tWith our measured and long-term approach, we are always thinking for the future and for sustainable growth. Regulators and investors are increasingly taking into account the role banks play in the development of sustainable economies. As a leading financial institution, UOB is committed to promoting\tresponsible\tfinancing\tin\tthe\tregion.\tWe\tintegrate environmental, social and governance factors in our risk and credit assessment processes. For our customers and their businesses, we have invested time and resources to understand their needs and priorities. Given our\tdeep\tpresence\tin\tASEAN,\twe\tare\twell\tplaced\tto\tprovide\tour customers insight into the region and nuances of local market conditions, helping them to capture the region's potential. Our stability, expertise and strength provide the assurance needed, especially in volatile times. We will continue\tto build\ton our strengths,\tguided by our time-tested values of honour, enterprise, unity and commitment, and a strong sense of accountability to our stakeholders. As we move beyond our 80th year, to each of you, we renew our commitment to achieving sustainable and stable growth that creates long-term value for all. 2015 Financial Performance In\t2015,\twe\tkept\tour\tearnings\tsteady\tand\tour\tbalance\tsheet strong despite the challenging and volatile environment. Net\tearnings\tfor\t2015\tstood\tat\t$3.21\tbillion,\t1.2\tper\tcent\tlower from a year ago as prior year results included a higher writeback of tax provisions. Total\tincome\tfor\t2015\tgrew\t7.9\tper\tcent\tto\treach\t$8.05\tbillion, led by strong client franchise income and higher gains on sale of investment securities. UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 | 15 Deputy Chairman and CEO's Report Net interest income grew 8.1 per cent to a new high of $4.93\tbillion,\tdriven\tby\timproved\tnet\tinterest\tmargin\tand\tan expanded loan base. Net interest margin increased 6 basis points to 1.77 per cent, benefiting from rising interbank and swap offer rates in Singapore. Non-interest income rose 7.7 per cent to $3.12 billion. Fee income\tgrew\t7.7\tper\tcent\tto\t$1.88\tbillion\twith\tcredit\tcard,\tfund management and wealth management activities registering steady growth. Trading and investment income rose 16.8 per cent to\t$954\tmillion\ton\thigher\tcontributions\tfrom\tsale\tof\tinvestment securities and continued growth in treasury customer income. Total\texpenses\tincreased\t14.3\tper\tcent\tto\t$3.60\tbillion\ton\thigher staff costs, revenue and IT-related expenses as the Group continued to invest in people and technology. The increase was\talso\tpartly\tdue\tto\ta\tone-off\texpenditure\tof\t$67\tmillion incurred for the SG50 and UOB80 commemorative events and brand campaign. Our expense-to-income ratio was 44.7 per cent, or 43.4 per cent on a normalised basis. We are sharpening our focus on productivity and stepping up efforts to improve efficiencies across our businesses and network, especially in this environment of moderating growth. Maintaining a strong balance sheet remains our focus. As the credit\tcycle\tbegan\tto\tturn,\tthe\tnon-performing\tloan\t(NPL)\tratio rose\tslightly to\t1.4\tper\tcent.\tWhile\tspecific loan\tcharge-off increased in tandem to 19 basis points, total loan charge-off was\tstable\tat\t32\tbasis\tpoints.\tWe\tmonitor\tour\tportfolio\tclosely and\tare\tconfident\tof\tthe\tresilience\tof\tour\tasset\tquality\tand adequacy\tof\tprovisions.\tWe\tare\twell\tcushioned\tagainst\tcredit cost\twith\tour\tNPL\treserve\tcoverage\tof\t130.5\tper\tcent\tand\tstrong general allowances at 1.4 per cent of loans. 16 | UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 Our funding position remained healthy, with our deposit base firmly supported by our regional branch network. The Group's loans-to-deposits ratio (LDR) was stable at 84.7 per cent as at 31 December 2015. Our Singapore dollar and US dollar LDRs were similarly steady, at 91.7 per cent and 65.6 per cent respectively. To help us broaden and diversify our investor base including tapping the institutional secured funding market, we established our\tUS$8\tbillion\tGlobal\tCovered\tBond\tProgramme.\tOur\tLiquidity Coverage Ratios in Singapore dollars and all-currency basis averaged at a respective 217 per cent and 142 per cent in the fourth\tquarter\tof\t2015. Our\tcapital\tposition\tis\tstrong\twith\tCommon\tEquity\tTier\t1\tand Total\tCapital\tAdequacy\tRatios\tat\t13.0\tper\tcent\tand\t15.6\tper\tcent as at 31 December 2015 respectively. We\tmaintained\tour\tposition\tas\tone\tof\tthe\tworld's\ttop-rated banks with a rating of 'Aa1' by Moody's and 'AA-' by both Standard & Poor's and Fitch Ratings. Building on Asian connectivity In\t2015,\twe\tcontinued\tto\tsupport\tour\tcustomers\twith\tthe\tright balance of prudence and enterprise, harnessing the strengths of our Southeast Asian footprint and customer franchise. Despite the slowdown in Asian economies, we continue to witness the rise of Asian connectivity, led by globalisation and technological advancement. This, along with the structural trends of rising intra-regional trade and investment flows and the vast consumer market of Asia, presents growth opportunities for our customers. And we are well positioned to support them. We are creating a more distinctive and consistent experience for our customers, enabled by digital technology. This is wrapped with the human touch. UOB's advantage is in our established and integrated Southeast Asian\tnetwork\tand\tour\tdeep\tin-country\tknowledge.\tWith\tthe rising demand for the services we provide, we increased our support of Asian enterprises and financial institutions expanding along three key trade and investment corridors - between ASEAN\tand\tGreater\tChina,\twithin\tASEAN,\tand\twithin\tGreater China.\tWe\tsigned\tseveral\ttrade\tagreements\twith\tgovernment agencies\tin\tChina,\tIndonesia,\tThailand\tand\tVietnam\tto\tfacilitate the\texpansion\tand\tinvestment\tinterests\tof\tour\tcustomers.\tWe believe our clients will benefit further when the impact of cross-border\tprogrammes\tof\tthe\tASEAN\tEconomic\tCommunity, China's One Belt One Road initiative and the Trans-Pacific Partnership is progressively felt. We\talso\tdeepened\tour\tcoverage\tof\tIndonesia,\tthe\tPearl\tRiver Delta\tregion\tand\tthe\tYangtze\tRiver\tEconomic\tBelt.\tNew\tbranches were\topened\tin\tYangon,\tHong\tKong\tand\tSuzhou. We\tstrengthened\tour\tclient\tfranchise\tby\testablishing\tdedicated teams\tfor\tfinancial\tinstitution\tand\tfinancial\tsponsor\tclients.\tWe deepened our product and advisory capabilities to provide comprehensive solutions for our clients' increasingly sophisticated needs. For instance, our enhanced cash management and trade finance\tservices\tacross\tASEAN\tand\tGreater\tChina\thelped\tour clients improve their operating efficiencies, manage cash flows and better their returns on operating funds. Our hedging solutions helped businesses manage currency volatility. Overall, our efforts in building capabilities allowed us to deepen relationships with our clients and to attract new ones. Enhancing our customers' experience In\tRetail\tBanking,\twe\tare\tsharpening\tour\tfocus\ton\tthree\tareas: helping our customers save and invest wisely to prepare for life's milestones, providing payment options that match their lifestyles and harnessing digital technology to create a simple and consistent banking experience for them. We\tdesign\tour\tproducts\tand\tservices\taround\tthe\tfamily,\tbusiness and lifestyle needs of our customers. An example of this is how we helped our customers fight the pressures of declining returns in a low interest rate environment with solutions such as\tthe\tUOB\tONE\taccount\tand\tUOB\tIncome\tBuilder.\tOn\twealth management, we expanded our customer base and assets under management as we strengthened our product suite and advisory processes. We\tare\tcreating\ta\tmore\tdistinctive\tand\tconsistent\texperience\tfor our customers, enabled by digital technology. This is wrapped with\tthe\thuman\ttouch.\tWe\twere\tthe\tfirst\tfinancial\tinstitution outside the US to enable our customers to turn their Android smart-phones into electronic wallets and to make contactless payments with tokenised security worldwide through a single application - the UOB Mighty. The app enables our customers to bank, to dine and to pay on the go. We will continue to ride on innovation and technology to enhance our customers' experience with us at every touch point. At a broader level, we are helping to accelerate the growth of FinTech startups and innovators in the region. The FinLab, for instance, is an innovation hub bringing together UOB employees and\tAsia's\tbrightest\tstartups.\tWe\tare\tnurturing\tminds\tto\tcreate solutions in areas such as payments, wealth management, mobile banking and small- and medium-sized enterprise banking. Our\tjoint\tventure\twith\tTemasek\tHoldings\t-\tInnoVen\tCapital\t- provides venture debt financing to startups operating in hightech\tsectors\tacross\tAsia.\tWe\tare\thelping\tto\ttransform\temerging technologies into viable financial services of\tthe\tfuture. In encouraging the growth of new entrepreneurs and startups in Asia, we are also enhancing UOB's franchise in the small- and medium-sized enterprise segment. UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 | 17 Deputy Chairman and CEO's Report We remain confident of the region's growth potential. We believe that our disciplined approach of growth with stability and maintaining a strong balance sheet will ensure our resilience and enable us to support customers through cycles. Strengthening the social fabric We\tbelieve\tthat\tsustainable\tgrowth\tshould\talso\tenrich\tthe\tlives of people. This, as with helping businesses grow, takes time and effort. For example, we have helped nurture and promote artistic\ttalent\tacross\tthe\tregion\tfor\t40\tyears.\tIn\t2015,\tour\tflagship regional art programme, Painting of the Year, turned 34 years old.\tIn\tour\t80th year as a bank, we opened the UOB Southeast Asia\tGallery\tat\tthe\tNational\tGallery\tSingapore\tto\tbring\tthe world's largest collection of modern Southeast Asian art to all. Developing minds and future leaders helps ensure the success of a community. To mark our 80th anniversary, we set up the Wee\tCho\tYaw\tFuture\tLeaders\tAward\tto\tprovide\ttertiary\teducation for the less privileged students. As Singapore celebrated its golden\tjubilee\tof\tnationhood,\twe\texpressed\tour\tgratitude\tto the country's aging pioneers with a special donation to help care for the elderly and those with disabilities. At\tthe\theart\tof\tour\tsuccess\tare\tour\tcolleagues.\tWe\tthanked them for their part in UOB's growth with special UOB80 and SG50 gifts of cash and leave days. 2016 Outlook In\tthe\tnear\tterm,\tmarket\tturbulence\treflects\tnervousness\tabout China's slowdown and depressed oil prices and their impact on the\twider\teconomy.\tWe\texpect\tfinancial\tmarket\tvolatility\tto continue this year. Market sentiment aside, the situation now is different from the financial\tcrises\tof\t1998\tand\t2008.\tWe\tare\tnot\tfacing\tthe\tpast\tissues of high corporate leverage, outsized unhedged currency exposure or\ta\tglobal\tliquidity\tcrunch.\tAsian\teconomic\tfundamentals\tand corporate balance sheets are generally stronger than before and\tare\texpected\tto\twithstand\tpotential\tshocks.\tWhat\twe\tare experiencing is part of an economic down cycle, not a crisis. 18 | UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 We remain confident of the region's growth potential. We believe that our disciplined approach of growth with stability and maintaining a strong balance sheet will ensure our resilience and enable us to support customers through cycles. UOB has withstood the challenges of time for the past eight decades. We\twill\tcontinue\tto\tinvest\tand\tto\tbuild\tour\tbusiness\tfor\tthe next 80 years. Our extensive regional network, strong local knowledge, deep customer relationships and dedicated people give us a distinct advantage\tto\tcapitalise\ton\tthe\topportunities\tbefore\tus.\tWe\tare confident of realising the full potential of UOB as we create value for our stakeholders. Acknowledgements I\twould\tlike\tto\tthank\tthe\tBoard\tdirectors\tfor\ttheir\tguidance\tand our people for their unwavering commitment and dedication to safeguarding the interests of all our stakeholders. To our customers and investors, thank you for your trust and confidence in\tUOB.\tWe\tlook\tforward\tto\tyour\tsupport\tin\tthe\tyears\tahead. Wee Ee Cheong Deputy Chairman and Chief Executive Officer February 2016 Board of Directors Wee Cho Yaw, 87 Chairman Emeritus and Adviser Non-Executive\tand\tNon-Independent First appointed as a director: 14 May 1958 Last re-appointed as a director: 24 April 2015 Conferred the title of Chairman Emeritus: 25 April 2013 A\tbanker\twith\tmore\tthan\t50\tyears'\texperience,\tDr\tWee\thad\tpreviously served in the positions of Chairman and Chief Executive Officer of United Overseas Bank from 1974 to 2007. Throughout his banking career,\tDr\tWee\thas\tbeen\tactive\tin\tpromoting\teducation\tand\tthe development of the community. He received an Honorary Degree of Doctor\tof\tLetters\tfrom\tthe\tNational\tUniversity\tof\tSingapore\tin\t2008 and a second Honorary Degree of Doctor of Letters in 2014 from the Nanyang\tTechnological\tUniversity.\tThe\thonorary\tdegrees\twere\tgiven for his long-standing support of education, community welfare and the business community. For his outstanding contributions to the economic, education and community development fields in Singapore, he was conferred The Distinguished Service Order, Singapore's highest National\tDay\tAward\tin\t2011. Board Committee Positions Board\tCredit\tCommittee\t(Member) Board\tRisk\tManagement\tCommittee\t(Chairman) Nominating\tCommittee\t(Member) Strategy\tCommittee\t(Member) Current Directorships and Principal Commitments Far Eastern Bank (Chairman Emeritus and Adviser) United Overseas Bank (Malaysia) (Chairman Emeritus and Adviser) United\tOverseas\tInsurance\t(Chairman) PT\tBank\tUOB\tIndonesia\t(President\tCommissioner) United Overseas Bank (China) (Supervisor) United Overseas Bank (Thai) Public Company (Chairman) UOL Group (Chairman) Pan Pacific Hotels Group (Chairman) Haw Par Corporation (Chairman) United\tIndustrial\tCorporation\t(Chairman) Marina Centre Holdings (Chairman) Nanyang\tTechnological\tUniversity\t(Pro-Chancellor) Singapore\tChinese\tChamber\tof\tCommerce\t&\tIndustry\t(Honorary President) Singapore Federation of Chinese Clan Associations (Honorary President) Singapore\tHokkien\tHuay\tKuan\t(Honorary\tPresident) Wee\tFoundation\t(Chairman) Chung Cheng High School (Director) Past Directorships in Listed Companies in the Last Three Years United\tInternational\tSecurities\t(till\tDecember\t2013) Singapore Land (till October 2014) Education and Achievements Chinese high school education Honorary\tDoctor\tof\tLetters,\tNanyang\tTechnological\tUniversity\t(2014) The Distinguished Service Order, Singapore (2011) The Asian Banker Lifetime Achievement Award (2009) Honorary\tDoctor\tof\tLetters,\tNational\tUniversity\tof\tSingapore\t(2008) Credit Suisse-Ernst & Young Lifetime Achievement Award (2006) Businessman of the Year, Singapore Business Awards (2001) Businessman of the Year, Singapore Business Awards (1990) UNITED OVERSEAS BANK LIMITED ANNUAL REPORT 2015 | 19 Board of Directors Hsieh Fu Hua, 65 Wee Ee Cheong, 63 First\tappointed\tas\ta\tdirector:\t16\tJanuary\t2012 Last re-elected as a director: 24 April 2015 Appointed as Chairman: 25 April 2013 First\tappointed\tas\ta\tdirector:\t3\tJanuary\t1990 Last re-elected as a director: 24 April 2015 Appointed as Chief Executive Officer: 27 April 2007 Mr Hsieh has 40 years of experience in banking and capital markets in Asia. Previously, he served as the Chief Executive Officer and director of Singapore Exchange and a member of the T