People walk into the United Overseas Bank (UOB) building in the Raffles Place financial district in Singapore on August 10, 2023. (Photo by Roslan RAHMAN/ AFP)
SINGAPORE: Singapore's United Overseas Bank, or UOB, posted a faster-than-expected rise in third quarter net profit to a record, helped by brisk trading and investment, and flagged a pick up in loans growth next year.
Southeast Asia's third-largest bank by assets said on Friday July-September net profit jumped 16% to a record S$1.61 billion ($1.22 billion) from a year earlier. This beat the mean estimate of almost S$1.50 billion from four analysts polled by LSEG.
"Amid a volatile global economy, Southeast Asia stands out as a bright spot," said UOB Deputy Chairman and Chief Executive Officer Wee Ee Cheong in statement.
"We are confident of ASEAN's long-term potential, bolstered by strong economic fundamentals and a surge in foreign direct investment inflows with shifting supply chains," he added.
Wee projected high single-digit loan growth for 2025, versus low single-digit for 2024, according to slides accompanying the earnings results.
The bank expects double-digit fee growth, higher total income, cost-to-income ratio at 41% to 42% and credit costs within 25 to 30 basis points range, all broadly in line with 2024, the slides showed.
UOB's results followed that of larger peer DBS Group, which on Thursday posted a record net profit in the third quarter on the back of record fee income driven by wealth management, higher treasury customer sales and increased markets trading income.
The better third quarter performance was driven by record high net fee and trading and investment income.
However, net interest margins, a key gauge of profitability, were slightly lower at 2.05% in the third quarter from 2.09% in the same period a year earlier. - Reuters
