Singapore’s United Overseas Bank (UOB) affirmed its financial targets for 2024 despite reporting a 1% year-on-year increase in second-quarter net profit that fell slightly short of analyst forecasts.
In a statement released on Thursday, UOB Deputy Chairman and CEO Wee Ee Cheong acknowledged global economic challenges stemming from geopolitical tensions and rising interest rates but expressed confidence in ASEAN’s resilience.
According to presentation slides accompanying the earnings report, UOB maintained its 2024 projections, expecting low single-digit loan growth, double-digit fee growth, and overall income expansion. The bank also reiterated expectations for a core cost-to-income ratio between 41% and 42%, and credit costs at the lower end of 25 to 30 basis points.
For the April-June period, UOB reported a net profit of S$1.43 billion ($1.07 billion), up from S$1.42 billion a year ago, driven by increased net fee income, a recovery in loan-related and wealth management fees, and robust growth in credit card fees. However, this figure was slightly below the consensus estimate of S$1.44 billion from analysts polled by LSEG.
The bank noted a decline in net interest margin to 2.04% in the first half of the year, down from 2.13% in the same period last year, reflecting ongoing margin pressure.
UOB’s results mark the beginning of the earnings season for Singaporean banks, with larger peers DBS and Oversea-Chinese Banking Corp (OCBC) set to report their quarterly results on August 7 and Friday respectively.
During the second quarter, UOB saw a notable 40% year-on-year increase in wealth management income and a 10% year-on-year rise in total assets under management to S$182 billion, as indicated in the company’s presentation slides.
The bank declared an interim dividend of 88 Singapore cents per ordinary share.
