UOB’s net profit up 5% to S$1.5b in Q3

Net fee income growth helped drive profits.

UOB has posted a core net profit of S$1.5b or approximately US$1.09b for the third quarter, a 5% year-on-year rise compared to the same quarter last year, its latest financial report revealed.

The bank attributed this to strong income growth from higher net fee income and net interest income.

Net fee income grew 14% to S$591m or US$430.4m, driven by higher credit card fees, wealth management fees, and loan-related fees.

Notably, credit card fees doubled to a record high of S$104m, UOB said.

Net interest margin expanded 14 basis points, driving net interest income up by 9% YoY.

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Other non-interest income rose 1% from a year ago, which UOB said was thanks to higher customer-related treasury income. This was moderated by lower valuation on investments due to a volatile market.

Credit costs in Q3 improved 11 basis points compared to Q2, to 19 basis points. Non-performing loans (NPL) ratio is 1.6%.

Along with its Q3 performance, UOB gave an update for its Citigroup integration, saying that it is “on track.”

“Integration for Indonesia, Thailand and Vietnam is progressing as planned after we successfully migrated all Citigroup customers in Malaysia to our platform,” said Wee Ee Cheong, deputy chairman and CEO of UOB.

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Looking ahead, Cheong noted that the macroeconomic environment could remain bumpy, especially with recent geopolitical tensions which he said added to “market volatilities.”

“However, we expect the ASEAN region to stay resilient. Consumer sentiments remain strong and rising investment flows into the region will bolster growth,” Cheong said.

“For UOB, our strong balance sheet, backed by diversified revenue drivers, will help smoothen the ride ahead and we stand ready to support our customers in these uncertain times,” he added.

(US$1 = S$1.37)

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