Singapore-based lender United Overseas Bank (UOB) has signed a memorandum of understanding with Korea Housing Finance Corporation (KHFC) to collaborate on investment banking, environmental, social and governance (ESG) financing and treasury services.

The Korean state-owned financial company aims to expand its footprint in Southeast Asia, including in Singapore, Indonesia, Malaysia, Vietnam and Thailand.

The two companies will cooperate in issuing regular bonds and covered bonds. UOB will support KHFC in expanding the investor base for its mortgage-backed securities (MBS) under the bank’s ESG-related financing frameworks.

The Singaporean bank will also provide KHFC with treasury services such as derivatives transactions for hedging foreign exchange risk, as well as cash management services. KHFC’s Singapore branch office, which opened on May 11 at the Marina Bay Financial Centre, is its first overseas venture.

UOB started working with KHFC in 2019, when the bank set up its financial institution unit in Korea. In 2020, UOB invested in the bank’s first Korean won-denominated social MBS issued by KHFC. UOB was also KHFC’s first foreign investor in its MBS. The social MBS was previously only available for the Korean market, but with UOB’s investment KHFC was able to reach out to a number of foreign investors.