Singapore bank UOB reported on Friday that its second-quarter net profit rose 28 percent on-year to a fresh high of S$1.08 billion, above some analysts’ forecasts, amid strong overall operating income.
UOB said net interest income for the quarter rose 14 percent on-year to S$1.54 billion, supported by 10 percent loan growth and a rise in the net interest margin to of 8 basis points to 1.83 percent.
Net fee and commission income in the quarter rose 11 percent on-year to S$498 million on broad-based growth in loan-related, fund management, credit card and trade-related fees, it said. Other non-interest income for the second quarter decreased 3 percent on-year to S$302 million, mainly on a lower net gain from investment securities, UOB said.
Daiwa had forecast net profit of S$964 million, with net interest income of S$1.499 billion, non-interest income of S$807 million and fee income of S$507 million, with a net interest margin of 1.82 percent.
Total expenses for the second quarter rose 10 percent on-year to S$1.02 billion, mainly on staff expenses and planned information-technology related investments., it said.
Allowances halved to S$90 million in the second quarter with the year-earlier period seeing specific allowance for non-performing loans from the oil and gas and shipping sectors, it said.
UOB declared an interim dividend of 50 Singapore cents a share, up from 35 Singapore cents in the year-earlier period.
“In the face of rising uncertainty globally, our stable asset quality, robust capitalisation and diversified funding base put us in a strong position to drive future growth,” Wee Ee Cheong, UOB’s deputy chairman and CEO, said in the statement. “As a long-term player, we
remain steadfast in augmenting our regional footprint to extend our reach to a wider group of customers and to tap the region’s connectivity potential.”
For the first half of 2018, UOB reported record net profit of S$2.05 billion, up 24 percent on-year. Total income rose 10 percent on-year in the first half to S$4.57 billion, on strong growth momentum in both net interest income and net fee and commission income as well as lower allowances, it said.
This article was originally published on Friday, 3 August 2018 at 7:10 A.M. SGT; it has since been updated.