Singapore: Strong interest income boosts UOB's net profit to S$845m

In the past quarter, the group was supported by a robust net interest income, which increased 12% to S$1.36 billion.

Picture for representation Reuters

Singapore banking giant UOB performed strongly in the past quarter and managed to report a 5.5% increase in net earnings to S$845 million.

In the past quarter, the group was supported by a robust net interest income, which increased 12% to S$1.36 billion. The gross loan growth of 7.3% and an improvement in net interest margin of seven basis points to 1.75% have driven this expansion in UOB's net interest income.

The bank's non-interest income also improved in the quarter, up 1.8% to S$828 million. Under this, fee and commission income grew 9.0% to S$517 million, thanks to the higher credit card, fund and wealth management fees.

On the other hand, other non-interest income declined by 8.3%, dragged by the lower net trading income.

In terms of expenditures, the group incurred 7.3% higher to S$995 million. This was due to the higher staff and IT-related expenses.

The bank maintained a healthy funding position. Its loan-to-deposit ratio stayed at 86.1%, with a 4.7% increase in customer deposits to S$260 billion led by the growth in Singapore dollar and US dollar deposits.

For the first half of the year, gross loans rose to S$228 billion. It has also issued S$2.54 billion in debt and capital securities to diversify its funding mix and to refinance debts due for redemption this year.

UOB CEO Wee Ee Cheong said amidst the moderate environment, the group accomplished a healthy performance with broad-based growth in revenue streams.

"Our asset quality was stable and core capitalisation remained high, reflecting our discipline in keeping a strong balance sheet through economic cycles," he said in a press release.

He added that UOB's presence and expertise enable the bank to connect customers with the opportunities across the region arising from burgeoning consumer affluence and growing intra-regional trade and investment.

"The recent signing of two Memoranda of Understanding in China are further examples of how we facilitate cross-border activities between China and Southeast Asia. We will continue to enhance our capabilities and productivity to strengthen our franchise further and to continue creating value for our shareholders," he stated.