[ad_1]
SINGAPORE – UOB reported strong earnings in the first quarter as high interest rates boosted its profit margins, even as its chief executive flagged growing concerns over global growth following banking crises in the United States and Europe.
The core net profit of Singapore’s third-largest bank stood at a record $1.6 billion in the last quarter, up 74 per cent from a year ago. This excluded one-off expenses related to its acquisition of Citigroup’s Malaysia, Thailand and Vietnam consumer banking business.
Factoring in these expenses, net profit came in at $1.5 billion, representing a 67 per cent increase from the same period last year.
Net interest income rose 43 per cent to $2.41 billion, bolstered by an uplift of 56 basis points in its net interest margin – a key gauge of a lender’s profitability.
However, net fee and commission income slipped 4 per cent to $552 million due to softer loan-related and wealth management fees compared with a year ago.
Other non-interest income surged to $563 million, up from $101 million a year ago, on record high trading and investment income. It was buoyed by customer-related treasury income, supported by hedging demand and improved performance from trading and liquidity management activities.
UOB, which pays dividends half-yearly, said its performance in the first quarter was underpinned by broad-based growth across its wholesale, global markets and retail businesses.
Deputy chairman and chief executive Wee Ee Cheong said the bank’s “prudent management and long-term focus” have put it in good stead amid the challenging operating environment.
The bank set aside more general allowances in the first quarter for potential bad loans, even as total allowance declined 8 per cent due to fewer specific provisions.
Mr Wee added: “Our Citigroup integration is progressing well. We are on track to close (the acquisition) in Indonesia by the end of the year after completing our acquisition in Malaysia, Thailand and Vietnam…
“Asia is poised to register growth this year and we are well-positioned to ride the region’s economic recovery with our strong balance sheet, backed by healthy capital and liquidity positions.”
Core net profit was up 13 per cent from the fourth quarter’s $1.4 billion. Wealth management fees rebounded strongly from improved investor sentiment.
UOB’s results mark the start of local banks’ earnings season. DBS Bank will report its earnings on May 2, and OCBC Bank on May 10.
[ad_2]
Source link