WHAT do UBS, ING and the Royal Bank of Scotland (RBS) have in common?

They are all important sponsors of sports, despite being hit hard by the financial crash.

UBS is sponsoring the Singapore stopover of the Volvo Ocean Race, ING is backing Renault's Formula One team and RBS is supporting the Williams F1 team.

But with governments injecting capital into these banks to prevent them from collapsing, some ask why they are still spending on mega sponsorships.

US insurer AIG will not renew its sponsorship of the US Davis Cup tennis team after being on the brink of bankruptcy in September.

But the banks defend their moves as a necessary measure to keep business going, saying that it pays to advertise, even during bad times.

Brand visibility

A UBS Singapore spokesman said: 'Sponsorship is an investment to strengthen our brand, increase client loyalty, engage our employees and demonstrate our commitment to the communities we do business in.'

The Swiss bank received US$60 billion ($90 billion) from the Swiss government after massive losses.

The spokesman declined to reveal the details of its sponsorship of the Singapore stopover of the Volvo Ocean Race, citing confidentiality.

It is the first time the 35-year-old yachting race is visiting South-east Asia, and UBS is taking the opportunity to show its commitment to the region.

The spokesman said: 'The Singapore stopover develops the young sailing community here through exposure to the best-in-class sailing teams of the world, as well as helps establish Singapore as a nautical hub.'

The organiser, One15 Singapore Ocean Race, thinks it is good that UBS is still willing to sponsor the event.

Its chief operating officer, Mr Rob Turnbull, said: 'Having UBS as title sponsor of the Singapore stopover not only elevates the profile of the event, but also cements confidence in the city as host venue.'

ING, which spends between 50 million euros

($93 million) and 100 million euros annually on F1 sponsorships, said the exposure helps to build awareness of the bank.

The Dutch bank received 10 billion euros from the Dutch government after credit-market losses drove its shares to a 13-year low.

ING's press and public relations director Jonathan Tracey said in a phone interview: 'Our research shows people are more likely to buy a product that is linked to F1, such as our F1 credit cards.

'If F1 is making money for us, then it'd be foolish to stop our sponsorship, especially during this period.'

ING's contract with Renault expires next year, but it has an option to renew for another three years.

RBS, which received ??pounds;20 billion ($47 billion) from the UK government, said: 'RBS has successful sponsorships which have been selected to meet very specific business objectives such as raising brand awareness as we enter new markets.'

While sponsorships are continuing, companies here are cutting their year-end party budgets.

Mr Kellvin Ong, general manager of Rendezvous Hotel, said: 'Instead of free flow of wines and beers, our clients are asking for soft drinks, which are 40 per cent cheaper.

'And when we show them the menu, they ask to replace lobsters with crayfish, which are cheaper by 50 per cent.'

Ms Belladonnah Lim, director of marketing communications at Fairmont Singapore and Swissotel the Stamford, said: 'Several companies are requesting complimentary items together with their package, such as soft drinks or juices.'

However, a spokesman for Park Hotel Group, which runs Grand Plaza Park City Hall and Park Hotel Orchard, said bookings at the former hotel actually rose by 40 per cent compared with last year.

But the spokesman added: 'We've had clients asking for cheaper rates... Two companies also cancelled their bookings and spent the money on spa and gift vouchers for their staff instead.'

This article was first published in The New Paper on November 9, 2008.