SE Asia seen as haven from trade war

Bloomberg

United Overseas Bank Ltd (UOB) is betting Southeast Asia will shield it from the escalating trade war between the US and China, distancing itself from the approach of its two main rivals that have expanded their focus to Hong Kong and the mainland.
“Asean will become a safe haven,” Chief Executive Officer Wee Ee Cheong said in an interview at UOB headquarters in Singapore, referring to the Association of Southeast Asian Nations. Founded by his grandfather in 1935, Wee’s bank is taking a distinct path from its larger Singaporean rivals which took over lenders in Hong Kong as a gateway to mainland China, the engine of Asia’s growth in the past two decades. Now the tides are turning as the US-China trade war enters a new phase with rising tariffs that will hit Asia’s biggest economy.
“Hong Kong is a city. It is just part of China,” said Wee, 66. Most of the banking industry in the city is controlled by HSBC Holdings Plc, Standard Chartered Plc and Chinese banks, he said. “No matter how big you buy, you are just a marginal player.”
Oversea-China Banking Corp., Southeast Asia’s second-largest lender, spent about $5 billion buying Wing Hang Bank in Hong Kong in 2014 after DBS Group Holdings Ltd. bought Dao Heng Bank in 2001. Both firms are expanding in China’s Greater Bay \
Area strategy that connects Hong Kong to major coastal cities on the mainland to form a new technology and economic hub.
UOB isn’t shunning China entirely. While the bank wants to sell its 13 percent stake in Hengfeng Bank on the mainland, which it bought in 2008, it plans to deploy capital by
increasing the number of its own branches there, Wee said. “I would rather grow myself,” he said. The bank also has wholesale banking operations in Hong Kong and the mainland that capture investment and business flows between Greater China and Southeast Asia. Wee’s focus on Southeast Asia carries on a presence built in the region mostly by his billionaire father Wee Cho Yaw, who ran the bank from 1960 to 2007. His grandfather Wee Kheng Chiang established the family’s first bank in Malaysia’s Sarawak in 1924 before founding Singapore’s UOB in 1935.
With 10 nations and 650 million people, Asean boasts a combined economy that’s bigger than India’s and is forecast to be the world’s fourth largest by 2030. It will have three of the seven fastest-growing economies over the next decade, based on Standard Chartered’s projections.