UOB reports 4.4% drop in profits in first quarter

UOB says it received higher net interest income in the quarter ended March 31.

United Overseas Bank (UOB) reported a 4.4 percent drop in profits in the first three months of the year, weighed down by a decline in wealth management business fees and trading income.

The banking group's net earnings in the first quarter stood at S$766 million compared with $801 million in the same quarter a year ago.

The smallest among Singapore's big three listed banks said it received higher net interest income in the quarter ended March 31.

While net interest income grew 6.1 percent, non-interest income fell 8 percent. At the same time, total expenses increased 4.9 percent from a year ago to S$894 million. Non-performing loan (NPL) ratio remained stable at 1.4 percent.

UOB said though revenue moderated in line with the slower growth environment, it continues to maintain a healthy balance sheet, stable asset quality and strong core capitalisation.

"Our recent successful issuances of covered bonds and subordinated notes reflect the confidence investors have in us," Wee Ee Cheong, deputy chairman and chief executive officer, said.

"Even as the region faces macro headwinds in the near term, we believe its economic fundamentals are largely capable of coping with bouts of market volatility. Our resilient balance sheet puts us in good stead to support our customers through economic cycles. At the same time, we stay focused on building our core franchise for the long term," the CEO added.

UOB had reported a narrow 0.3 percent rise in the fourth-quarter net profit. The bank said risks were largely manageable as underlying economic fundamentals were strong.