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Photo courtesy of Terence Ong via Wikimedia Commons.

UOB posts record net profit of S$1.6b in Q1

Core operating profit was also 60% higher at S$2.1b.

UOB posted a record net profit of S$1.6b in Q1 2023, 74% higher than the first quarter of 2022, according to the bank’s latest bourse filing.

Core operating profit was also 60% higher at S$2.1b over the same period of comparison.

The Singapore bank saw its net interest margin expand 56 basis points during the quarter, driving net interest income up 43%.

Non-interest income also surged 66% to S$1.5b. UOB attributed this to a record high on trading and investment income, supported by hedging demand. Trading and investment income rose to S$474m in Q1, from only S$203m in Q4 2022 and S$44m in Q1 2022.

UOB also saw growth in its wholesale and retail banking businesses. Operating profit from the bank’s group retail business more than doubled to S$795m during the quarter, from S$376m in Q1 2022.

Operating profit of the bank’s group wholesale banking business rose 38% to S$1.42b from S$1.03b a year ago.

These were slightly offset by a decline in the operating profit of the bank’s global markets business. Its Q1 operating profit came at S$97m, 30% lower than the S$138m recorded for the first quarter of 2022. Whilst Global Markets captured opportunities from bonds, foreign exchange, rates and commodities, these were mdoerating by rising costs of funds, UOB noted.

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With the exception of Greater China, core operating profit across all markets grew in Q1 when compared to the previous quarter. 

Retail deposit base reportedly grew 15% during the quarter compared to 2022; and credit card fees almost doubled as well.

For 2023, UOB CEO Wee Ee Cheong expects low to mid-single-digit loan growth, double-digit fees growth, and credit costs of between 20 to 25 basis points.

“Asia is poised to register growth this year and we are well-positioned to to ride on the region’s economic recovery with our strong balance sheet, backed by health ycapital and liquidity positions,” Cheong said in a press statement.

Cheong also gave an update on its integration of Citibank’s assets, saying that it is “progressing very well.”

“We are on track to close in Indonesia by the end of the year after completing our acquisition in Malaysia, Thailand, and Vietnam,” he noted.

The acquisition is expected to achieve a projected revenue uplift of S$1b in total across all four markets for 2023.

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