SINGAPORE: Singapore’s United Overseas Bank (UOB) reported on Thursday (Jul 27) a 27 per cent increase in net profit in the second quarter from a year earlier that is in line with expectations mainly on stronger net interest income.
UOB, Southeast Asia’s third-largest bank by assets, said April to June net profit rose to S$1.42 billion (US$1.07 billion) from S$1.11 billion a year earlier.
This compares with the mean estimate of S$1.43 billion from three analysts polled by Refinitiv.
The better results were also driven by better other non-interest income arising from higher customer-related treasury income and performance from trading and liquidity management activities, according to a statement.
“While the global outlook remains uncertain, we expect the ASEAN region to stay relatively resilient,” said Wee Ee Cheong, CEO of UOB said in the statement.
“Growth will be supported by a more moderate interest rate environment in this region and a pick-up in tourism and demand for services,” he added.
Singapore banks have been benefiting from a strong inflow of wealth amid global uncertainty due to the city-state’s status as a financial safe haven. Larger peers DBS Group and Oversea-Chinese Banking Corp are due to announce their quarterly earnings results next week.
Last year, UOB acquired Citigroup’s consumer business in four Southeast Asian markets for about S$5 billion, marking its biggest deal in two decades. When completed, the move will double its retail customer base in these markets.
“Our Citigroup acquisition is progressing well,” Wee said.
UOB declared an interim dividend of 85 Singapore cents per share.
It reported a net interest margin, a key gauge of profitability, of 2.13 per cent in the first half of this year, higher than 1.63 per cent in the same period a year earlier.
UOB expects low to mid-single-digit percentage loan growth for this year, high single-digit fees growth, credit costs at around 25 basis points, and margins to remain stable at current levels.
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