United Overseas Bank (UOB), the third-largest bank in Southeast Asia, shocked the financial world today by posting a stunning 27% growth in net profit in Q2 compared to the same period in the previous year. This increase, riding largely on the back of a stronger net interest income, has met analysts’ expectations.
UOB’s Q2 net profit rose from S$1.11 billion a year earlier to an impressive S$1.42 billion, almost mirroring the Refinitiv-polled analyst’s mean estimate of S$1.43 billion.
The upturn isn’t just due to net interest income. A hike in non-interest income, primarily from enhanced customer-related treasury income and improved trading and liquidity management activities, also fueled this progression.
While the world grapples with economic uncertainties, UOB’s CEO, Wee Ee Cheong, remains optimistic about the resilience of the ASEAN region. “Supported by a more moderate interest rate environment in this region and a revival in tourism and service demand, growth is forecasted,” he stated.
UOB, like other Singaporean banks, has been capitalising on the strong wealth inflow, thanks to Singapore’s status as a financial safe haven amidst global turbulence. The city’s banking giants DBS Group and Oversea-Chinese Banking Corp will announce their Q2 results next week, which are eagerly awaited.
Also read: Unraveling Singapore’s Political Quake: A New Test for Party Legacy
In a monumental move last year, UOB doubled its retail customer base in four Southeast Asian markets by acquiring Citigroup’s consumer business for around S$5 billion, marking its most significant deal in the last two decades. CEO Wee confirmed that the Citigroup acquisition is on track.
UOB also announced an interim dividend of 85 Singapore cents per share for its stakeholders. Meanwhile, the bank reported an increase in its net interest margin, a crucial profitability indicator, from 1.63% in H1 of the previous year to 2.13% this year.
UOB forecasts a steady growth trajectory for the year ahead, including low to mid-single digit percentage loan growth, high single-digit fee growth, and credit costs hovering around 25 basis points. Additionally, the bank expects its margins to remain stable at the current levels.
(Source: Malay Mail)
