UPDATE: UOB reports 3Q19 net profit grew 8 percent on higher trading and investment income

Singapore UOB bank branchSingapore UOB bank branch

This article was originally published on Friday, 1 November 2019 at 8:18 A.M. SGT; it has since been updated to add more detail.

UOB reported Friday its third quarter net profit climbed 8 percent to S$1.12 billion on stronger client franchise income and trading and investment income.

Net interest income for quarter increased 5 percent to S$1.69 billion on loan growth of 8 percent, the bank said in a filing to SGX.

Net fee and commission income rose 14 percent on-year to S$551 million as fees from wealth management, loan-related and credit cards increased, while other non-interest income climbed 52 percent on-year to S$371 million, the filing said.

Trading and investment income increased 67 percent on-year to S$310 million on improved customer flows and gains from investment securities, the bank said.

The net interest margin, or the difference between the interest rate banks charge to lend and their cost of funds, dropped to 1.77 percent in the quarter from 1.81 percent in the year-ago period, UOB said.

Daiwa had forecast net profit of S$1.09 billion, with net interest income of S$1.70 billion, fee and commission income of S$522 million and NIM of 1.82 percent.

“We kept up the growth momentum across our revenue streams despite the global economic slowdown. We also maintained a healthy balance sheet with sound asset quality and robust capital and liquidity positions,” Wee Ee Cheong, UOB’s chairman and CEO, said in the statement.

“Looking ahead, we expect business sentiment to be weighed down by global economic headwinds. However, our regional footprint positions us well to capture the continuing investment flows as businesses diversify their supply chains into the region amid the ongoing trade tensions,” Wee added. “Our newly-opened branches in Hanoi, Vietnam and Zhongshan, China have added to the connectivity we offer to our customers across Southeast Asia and China.”

For the nine-month period, UOB reported net profit rose 8 percent on-year to S$3.34 billion, with net interest income up 7 percent on-year at S$4.93 billion and net fee and commission income up 4 percent on-year at S$1.56 billion.

The bank did not declare a dividend for the third quarter, unchanged from the year-ago period.

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