United Overseas Bank : Posts Rise in 1Q Net Profit
By Saurabh Chaturvedi
United Overseas Bank Ltd. (U11.SG) on Friday beat expectations with a 5.4% rise in its first-quarter net profit from a year earlier, helped by higher net interest income and noninterest income and an increase in loans.
Net profit in the January-March quarter was 807 million Singapore dollars (US$577.7 million), compared with S$766 million in the same period last year, UOB said in a statement to the Singapore Exchange. Total income in the quarter grew 7.8% to S$2.12 billion.
The Singapore-listed bank was expected to post a net profit of S$747.1 million along with a total income of S$2.07 billon in the quarter, according to FactSet.
Net interest income rose 2.3% to S$1.30 billion from a year ago, while fee and commission income rose 18% to S$508 million, while other noninterest income was 19% higher at S$311 million, said UOB, the smallest of Singapore’s three listed banks.
The noninterest income growth was driven by higher fund management and wealth management fees. Trading and investment income also grew due to higher trading income.
Total expenses increased 7% from a year ago to S$957 million, largely from higher staff costs and revenue-related expenses.
Net interest margin stood at 1.73%, down from 1.78% last year, while the ratio of bad loans to the total was 1.5% compared with 1.4%.
Net customer loans rose to S$225.11 billion from S$205.58 billion last year. Total allowances for loans and other assets in the quarter was $186 million, 59% higher from a year earlier, it said.
“We remain disciplined in pacing our growth, tapping the increasing connectivity and affluence in the region through targeted investments to build a sustainable franchise,” said Wee Ee Cheong, UOB’s chief executive.
Write to Saurabh Chaturvedi at [email protected]