SINGAPORE – United Overseas Bank is freezing the wages of its staff and limiting hiring as it braces itself for the economic fallout from the coronavirus pandemic.

In response to media queries, UOB head of group human resources Dean Tong said: “As we focus on protecting the livelihoods of our people, we are keeping salaries at their current levels for now and will revise our stance as the external environment improves.”

On hiring, he told The Straits Times that the bank will take a “disciplined and selective approach to any new headcount increases”, with new appointments to be “approved at the most senior levels”.

He stressed that UOB will continue investing in and hiring for roles essential to its strategic priorities.

Mr Tong told ST that these strategic roles include positions in areas such as technology and data analytics, as well as commercial and corporate banking.

“Given the transformational times we are in, we remain committed to seeing our people through to better times and will continue to invest in their reskilling and upskilling. This will ensure that our people, and the bank, will emerge stronger when these difficult days are over.”

In an internal memo, the bank told senior staff that it expects the situation to worsen before improving when the Government cuts some of its support, reported Bloomberg on Tuesday (Sept 15).

Salary increases and promotions will be put on hold until further notice, Bloomberg quoted the memo as saying. It reported that the hiring restrictions will last until December 2021.

“We will review these dynamically as and when the situation improves,” the memo added. It was sent on behalf of Mr Tong, head of group strategy and transformation Federico Burgoni and group chief financial officer Lee Wai Fai, said Bloomberg.

Singapore’s third-largest bank posted a 40 per cent fall in second-quarter net profit to $703 million due to weaker income and a surge in provisions set aside to brace for the easing of loan moratoria, UOB chief Wee Ee Cheong told analysts and media at a briefing in August.

This was weaker than the consensus forecast of $815 million in net income estimated by four analysts in a Bloomberg poll.

Bloomberg Intelligence banking analyst Diksha Gera said in a report on Tuesday that UOB’s “hiring, pay and promotion freeze” poses risks to dividend payout this year, as the lender could see more than a 30 per cent fall in profit because of continued economic headwinds in key markets.

“UOB’s higher exposure to small businesses in Singapore raises its vulnerability versus peers DBS and OCBC,” she wrote.