UOB’s net profit for its second quarter rose due to double-digit fee income growth and lower credit allowances, it said on Thursday (Aug 1).
Net profit for the three months ended Jun 30, 2024, stood at S$1.43 billion, a 1 per cent increase from S$1.42 billion previous year.
Excluding one-off expenses incurred in the acquisition of Citigroup’s consumer banking businesses, the bank’s net profit for Q2 would have been S$1.49 billion – beating the S$1.47 billion consensus forecast in a Bloomberg survey of three analysts.
The lender declared a dividend of S$0.88 per share for the half-year ended Jun 30, up from S$0.85 per share in the year-ago period.
UOB’s net fee income for Q2 grew 18 per cent year on year to a near historical high of S$618 million, driven by a rebound in loan-related and wealth management fees, as well as double-digit growth in credit card fees.
Net interest income for the quarter fell 1 per cent to S$2.4 billion due to a moderation in net interest margin. Net interest margin was down seven basis points to 2.05 per cent for the quarter, from 2.12 per cent in the previous corresponding period.
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Other non-interest income was down 21 per cent to S$457 million, as swap gains and valuation on investments fell, even as customer-related treasury income strengthened.
The bank’s non-performing loans ratio was 1.5 per cent, down 0.1 percentage point from the same period a year earlier.
Total allowances fell by 26 per cent to S$395 million for the half year. The bank attributed this to lower specific and general allowances made as asset quality stabilised.
UOB chief executive Wee Ee Cheong said that the bank has observed positive trends across its businesses.
He noted that asset quality remains resilient, while the bank’s balance sheet remains strong with healthy levels of capital and funding.
Furthermore, he added that the lender’s one-time costs will be reduced substantially as the bank moves towards integration in Vietnam next year.
“We will focus on extracting both revenue and cost synergies from this portfolio as we deepen our customer relationship and provide our customers with a more comprehensive suite of solutions, including wealth management,” he said.
UOB shares closed 0.3 per cent or S$0.09 higher at S$32.35 on Wednesday.
