Overseas Union Bank (OUB)

Overseas Union Bank (OUB), now defunct, was founded in 1947 in Singapore by Lien Ying Chow. It began operations in February 1949, and by the 1970s had grown to become one of Singapore’s “Big Four” local banks.1 In 2002, OUB was acquired by United Overseas Bank (UOB) for S$10 billion.2

In 1943, Lien was based in Chongqing, China, having escaped the Japanese Occupation of Singapore (1942–45). There he gathered ethnic Chinese business leaders from Singapore, Malaya, Burma and India to form the Overseas Chinese Union Bank (OCUB). This predecessor of OUB had several branches in China and dealt largely with ethnic Chinese who had fled the conflict in Southeast Asia. After the end of World War II, the bank faced issues such as China’s unstable political situation and rampant inflation. Lien returned to Singapore and OCUB ceased operations in China.3

The banking industry, however, remained attractive to Lien, and in 1947 he made plans to form a new bank. OUB began operations on 5 February 1949, making it the first new bank to open in postwar Singapore. The first chairman of OUB was Tan Sia Kuang, a banker and owner of a rubber company, while Lien was vice-chairman. Other members of the OUB board included “Tiger Balm King” Aw Boon Haw, rubber magnate Tan Lark Sye and cinema entrepreneur Loke Wan Tho. Chi Owyang, who had been general manager of OCUB, filled the same position at OUB.4

Despite starting with a modest paid-up capital of $2 million and a lean staff of 27 including Lien and Owyang, OUB showed its confidence by setting up in Raffles Place, previously the preserve of established European and American banks and business houses. The new bank occupied the ground floor and basement of Meyer Chambers with a monthly rental of $4,000.5

Early history
In its early years, OUB found its niche in trade financing, especially for businesses importing rice from the region. OUB formed ties with Thai banks and rice exporters, and almost all Thai banks maintained a Singapore-dollar account with OUB. Up to the mid-1950s, OUB financed around 80 percent of rice imports into Singapore.6

While there had been some doubts over the viability of OUB at its inception, by the end of its third year, the bank was able to declare a dividend of 5 percent to its shareholders.7 Such success was previously unheard of in the Singapore banking industry. Eight years after its opening, OUB embarked on an expansion phase, opening new branches not only in Singapore, but also in Malacca, Penang, Kuala Lumpur and Hong Kong. The international focus continued with new OUB branches in Tokyo and London in the 1960s. In 1972, OUB became the first Singapore bank to open in New York.8

In 1964, Lien sought to enter the hotel industry, with a dream of what later became the Mandarin Singapore Hotel.9 General manager Owyang felt that the bank should not bear the potential risks of the project, hence a separate company, Overseas Union Enterprise (OUE), was established.10 OUB and OUE held cross-shareholdings. By 1968, OUB had deposits of over S$300 million and 32 branches. Lien had taken over as chairman by this time, while Owyang had retired.11

Changes to Singapore’s banking sector in the early 1970s opened OUB to foreign banks and rendered the industry more competitive. OUB had achieved success while being run along the lines of a traditional Chinese business; many of the bank’s staff were family members and friends of shareholders, and staff were accustomed to a casual style of management.12

Lien recognised that OUB had to switch from doing business the old-fashioned way, and brought in former Housing and Development Board chairman Lee Hee Seng as the chief general manager in 1974. Lee instituted professional personnel policies, including putting an end to jobs for board members’ friends and family. He also improved productivity and efficiency, streamlined work processes and established clear lines of reporting and control.13

In addition, OUB introduced computer technology into its operations. The changes unsettled some and a union was formed for the first time in the bank’s history. OUB signed a collective agreement, but the threat of industrial action did not abate until 1975.14

By 1973, OUB’s paid-up capital had grown to S$50 million, with assets of around S$1 billion. Over the following decade, profits grew by an average of 25 percent annually, while assets and shareholder funds grew by over 20 percent.15 The bank was listed on the Singapore Exchange in 1975, becoming one of the largest public companies in Singapore then. Subsidiary companies dealing in areas such as finance, stockbroking and property were established; together with OUE, they formed the OUB Group.16

Rapid growth
In 1948, Lien began buying land at 1 Raffles Place for a flagship building for OUB. The land for the S$500-million building took 35 years to acquire in its entirety.17 After the 60-storey OUB Centre officially opened in 1988, Lien took a back seat in OUB. In 1995, he retired as chairman and director of OUB, and was named the honorary life counsellor.18
Under the leadership of chief executive officer and president Peter Seah in the 1990s, OUB Group’s after-tax profit grew by an average of 28.6 percent from 1992 to 1996, making it the fastest-growing bank among the “Big Four” local banks.19

The 1990s were watershed years for OUB. Its growth in both shareholders’ funds and profits were phenomenal, propelling it to become the fourth largest bank in the Association of Southeast Asian Nations as at December 1997. In 1991, shareholders’ funds of the OUB Group were S$926 million, and the after-tax profit stood at S$90.7 million. By 1996, shareholders’ funds had grown to over S$3.2 billion, and after-tax profit to S$310.4 million. In 1997, Euromoney magazine ranked OUB 22nd among Asia’s top-100 banks. The Far Eastern Economic Review magazine in 1997 selected it as one of the top 10 companies of Singapore.20

Acquisition by UOB
Despite its rapid growth in the 1990s, OUB remained the smallest of the local “Big Four”. When local banks came under pressure to consolidate in the early 2000s, OUB became a prime target for acquisition. A failed merger with French bank BNP Paribas in mid-2001 increased speculation that OUB would become a target for one of the other three banks, or merge with a smaller bank.21

In June 2001, the Development Bank of Singapore (DBS) made a hostile takeover bid of S$9.4 billion for OUB.22 This drew a competing bid of S$10 billion from UOB. Crucially, UOB’s bid was seen as a friendly one, gaining the support of the OUB board and management, as well as the backing of founder and substantial shareholder Lien.23

In September 2001, UOB announced that it had won over 90 percent in shareholder acceptance for its bid, enabling it to acquire OUB in its entirety and delist it. The acquisition made UOB the largest local bank in Singapore, with around S$115 billion in total assets.24

By the end of 2003, OUB was fully merged with UOB, with its branches converted to UOB ones and the OUB brand no longer in use.25


Alvin Chua

1. Richard Lim, Building a Singapore Bank: The OUB Story (Singapore: Overseas Union Bank, 1999), 16, 22 (Call no. RSING q332.1095957 LIM); Quek Peck Lim, “Tat Lee Bank Considers Going Public,” Business Times, 10 February 1979, 1. (From NewspaperSG)
2. Andrea Tan, “UOB, OUB Merger Complete,” Business Times, 17 June 2002, 5. (From NewspaperSG)
3. Lim, Building a Singapore Bank, 13–14, 16.
4. Lim, Building a Singapore Bank, 16, 22.
5. Lim, Building a Singapore Bank, 22, 27.
6. Lim, Building a Singapore Bank, 29–33.
7. Lim, Building a Singapore Bank, 34.
8. “Branch in New York Another First by OUB,” Straits Times, 13 April 1973, 15. (From NewspaperSG)
9. Joyce Koh, “Inspiring Story of Lien Ying Chow Lives On,” Business Times, 9 August 2004, 4. (From NewspaperSG)
10. Chuang Peck Ming, “The Making of a S'pore Tycoon,” Business Times, 17 February 1992, 13. (From NewspaperSG)
11. “The OUB Story: Building of a Singapore Bank,” Business Times, 5 February 1999, 3. (From NewspaperSG)
12. Lim, Building a Singapore Bank, 46, 57.
13. Lim, Building a Singapore Bank, 50.
14. Lim, Building a Singapore Bank, 57.
15. Lim, Building a Singapore Bank, 64.
16. “Overseas Union Bank,” Straits Times, 16 October 1996, 8. (From NewspaperSG)
17. “OUB Centre Confident of High Occupancy Rate,” Business Times, 22 April 1986, 3 (From NewspaperSG); Koh, “Inspiring Story of Lien Ying Chow Lives On.”
18. “Round of Applause for UOB,” New Paper, 30 June 2001, 2. (From NewspaperSG)
19. Lim, Building a Singapore Bank, 81.
20. Lim, Building a Singapore Bank, 83.
21. Angela Tan and Siow Li Sen, “Hopes of a Bigger French Connection Ignite OUB,” Business Times, 31 January 2001, 4. (From NewspaperSG)
22. Edna Koh, “DBS Makes $9.4b Bid for OUB,” Straits Times, 23 June 2001, 1. (From NewspaperSG)
23. Sara Webb, “United Overseas Bank Joins the Fray, Topping DBS’s Bid for Overseas Union,” Wall Street Journal, 2 July 2001.
24. Ignatius Low, “UOB Takes OUB and is Now No. 1,” Straits Times, 1 September 2001, 1. (From NewspaperSG)
25. Michelle Quah, “Last Traces of OUB Name Go With OUT,” Business Times, 29 April 2003, 6. (From NewspaperSG)

The information in this article is valid as at 2011 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic. 

Banks and banking--Singapore
Business enterprises