UOB Profit Climbs as Wealth, Credit Card Fees Buoy Earnnings
United Overseas Bank (UOB) reported a surge in quarterly profit as fees from wealth management and credit cards boosted earnings.
Strong Performance
UOB reported a net income of S$1.17 billion ($873 million) for the three months ended September, up from S$1.06 billion a year earlier. That beat the S$1.09 billion average of four analyst estimates compiled by Bloomberg.
The Singapore-based lender’s wealth management business saw a 14% increase in income to S$264 million, while fees from credit cards rose 8% to S$170 million.
Robust Loan Growth
UOB’s loan growth was robust, with total loans increasing by 8.2% from a year earlier to S$242.3 billion.
The bank’s net interest margin, a measure of profitability, was 1.76%, up from 1.75% a year earlier.
Strong Capital Position
UOB’s capital position remained strong, with its common equity tier 1 ratio at 14.3%, up from 14.2% a year earlier.
The bank’s non-performing loan ratio was 1.3%, unchanged from a year earlier.
Expansion Plans
UOB is looking to expand its presence in Southeast Asia, with plans to open more branches in the region.
The bank is also looking to expand its digital banking capabilities, with plans to launch a new mobile banking app in the coming months.
Outlook
UOB is optimistic about its outlook for the rest of the year, with the bank expecting to see further growth in its wealth management and credit card businesses.
The bank is also expecting to see further loan growth, with the bank’s loan book expected to grow by around 8% for the full year.
UOB is also expecting to see further growth in its net interest margin, with the bank expecting to see a margin of around 1.8% for the full year.
Risk Management
UOB is also focusing on risk management, with the bank looking to strengthen its risk management processes and controls.
The bank is also looking to strengthen its capital position, with the bank looking to maintain its common equity tier 1 ratio at around 14%.
Conclusion
UOB reported a strong set of results for the third quarter, with the bank’s wealth management and credit card businesses driving growth. The bank is also looking to expand its presence in Southeast Asia and is focusing on risk management and capital position. UOB is optimistic about its outlook for the rest of the year, with the bank expecting to see further growth in its wealth management and credit card businesses, as well as loan growth and net interest margin.