SINGAPORE (Nov 1): United Overseas Bank posted a positive set of results for the 3Q19 and 9M19 ended Sept 30, driven by strong income growth from across all its business segments.
During the quarter, UOB registered earnings of $1.12 billion, up 8% y-o-y, on the back of stronger client franchise income as well as trading and investment income.
Net interest income increased 5% y-o-y to $1.69 billion led by healthy y-o-y loan growth of 8%.
Net fee and commission income rose 14% y-o-y to $551 million as fees from wealth management, loan-related and credit cards were higher.
Trading and investment income also grew 67% y-o-y to $310 million from improved customer flows and gains from investment securities.
Meanwhile, total expenses increased 14% y-o-y to $1.15 billion, reflecting a cost-to-income ratio of 44.2%.
Total allowances increased 53% y-o-y to $145 million, owing to higher allowances for impaired assets.
During the nine-month period, UOB recorded y-o-y earnings growth of 8% to $3.34 billion.
Net interest income increased 7% y-o-y to $4.93 billion as gross loans grew 8% y-o-y.
Net fee and commission income also increased 4% y-o-y to $1.56 billion, driven by strong wealth management flows, higher loan-related and credit card fees, though moderated by lower fund management fees.
In addition, other non-interest income grew 41% y-o-y to $1.11 billion with trading and investment income rising 52% y-o-y to $892 million from higher customer flows and gains from investment securities.
On the balance sheet, UOB notes that its financial position remained “sound” against the uncertain global backdrop, supported by a diversified funding position and strong capital base.
As at end-September, cash and cash equivalents stood at $16.31 billion.
The bank’s loan-to-deposit ratio was stable at 89.3%, while common equity tier 1 ratio stayed robust at 13.7%.
Its non-performing loan ratio remained at 1.5% as at Sept 30. Furthermore, its total allowances for non-impaired assets stood at $1.98 billion with a higher coverage for non-performing assets at 85%, or 210% after taking collateral into account.
Looking ahead, UOB says it expects business sentiment to be weighed down by global economic headwinds.
“However, our regional footprint positions us well to capture the continuing investment flows as businesses diversify their supply chains into the region amid the ongoing trade tensions,” says UOB deputy chairman and CEO Wee Ee Cheong.
As at 9.38am, shares in UOB are trading 40 cents lower, or down 1.5%, at $26.43 after the results announcement.
