UOB’S net profit for the third quarter ended September rose 16 per cent year on year to S$1.61 billion, from S$1.38 billion the year before.
Its results released on Friday (Nov 8) beat the S$1.51 billion consensus forecast among four analysts polled by Bloomberg.
UOB deputy chairman and chief executive Wee Ee Cheong attributed this quarter’s improved performance to new record highs in net fee income as well as trading and investment income.
Earnings per share stood at S$3.79 versus S$3.23 in the year before.
Total income for the quarter grew 11 per cent to S$3.83 billion.
Core return on equity, which excluded one-off expenses related to the acquisition of Citi’s consumer banking business, was up 0.4 percentage point year on year at 14.3 per cent.
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Net interest income for the quarter grew 1 per cent to S$2.46 billion versus S$2.43 billion in Q3 FY2023.
Net interest margin (NIM) was down four basis points at 2.05 per cent.
Net fee income for the quarter rose 7 per cent on the year to a record S$630 million from S$591 million previously, driven by growth in wealth management fees. The group observed healthy trade and wealth demand, on top of a pick-up in card fees.
Trading and investment income rose 82 per cent to S$709 million, bringing other non-interest income up 70 per cent at S$744 million.
This came as customer flow treasury income reached an all-time high in addition to “exceptional” performance from trading and liquidity management activities, said the group.
Allowance for credit and other losses grew 29 per cent to S$304 million from S$235 million in the year prior, as total credit costs on loans grew to 34 basis points.
UOB said this was mainly due to “friction issues” among its Thai retail customers following the operational merger of Citi the prior quarter. The bank, however, said it expects this to normalise in the next two quarters.
UOB noted that asset quality remained stable, with its non-performing loan ratio unchanged at 1.5 per cent.
Cost-to-income ratio was down slightly at 42.4 per cent versus 44.4 per cent in Q3 FY2023, after accounting for one-off expenses from the group’s Citi acquisition.
Based on the Monetary Authority of Singapore’s revised requirements for risk-based capital adequacy effective Jul 1 this year, UOB’s CET-1 ratio stood at 15.5 per cent – but was 15.2 per cent on a fully loaded basis.
Shares of UOB closed S$0.61 or 1.9 per cent higher at S$33.30 on Thursday.
