UOB on Wednesday (Feb 19) posted a net profit of S$1.52 billion for the fourth quarter ended December, up 8.6 per cent from S$1.4 billion in the previous corresponding period.
This included S$17 million in one-off expenses from the lender’s Citigroup integration costs after taxes, which was 81.9 per cent lower than the S$94 million recorded in the same period the previous year.
The earnings beat the S$1.48 billion consensus forecast in a Bloomberg survey of six analysts.
The lender has declared a higher final dividend of S$0.92 per share for the half-year period, up from S$0.85 the year before.
This brings the full-year dividend to S$1.80 per share, representing a payout ratio of about 50 per cent. The lender is also proposing a special dividend of S$0.50 per share, paying out S$800 million of UOB’s surplus capital, over two tranches in 2025.
Net interest income for the quarter was up 2 per cent on the year to S$2.45 billion, driven by loan growth of 5 per cent. Net fee income was stable at S$567 million. Other non-interest income was up 1.1 per cent on the year to S$443 million. UOB’s non-performing loan ratio remained at 1.5 per cent as at Dec 31, 2024.
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For the full year, net profit was up 5.8 per cent to S$6 billion. Excluding the one-off Citigroup integration costs, core net profit would be S$6.23 billion, up 2.9 per cent on the year.
Returning surplus capital
As part of the bank’s capital distribution strategy, the board has announced a S$3 billion package to distribute surplus capital over the next three years. The package comprises special dividends and share buybacks.
This includes the introduction of a S$2 billion share buyback programme, where shares will be acquired from the open market and cancelled.
The lender noted that its capital position “will remain strong”, following the capital distribution.
The package is estimated to optimise UOB group’s Common Equity Tier 1 capital adequacy ratio by one percentage point, based on its capital position as at Dec 31, 2024.
Wee Ee Cheong, UOB’s deputy chairman and chief executive officer, is positive in sustaining the lender’s growth momentum. “Guided by our disciplined approach to balancing long-term growth with stability, we are poised to further enhance shareholder value in the years to come,” he added.
Shares of UOB ended Tuesday 0.1 per cent or S$0.04 higher at S$38.65.
