SINGAPORE: UOB will give junior employees an extra half-month base salary payout, in recognition of their contributions amid a challenging external environment.
About 6,000 employees across the group are expected to benefit from the one-off payment.
The payouts will total about S$4mil and be disbursed in the second quarter of 2026, the bank said in its earnings report yesterday.
UOB also recommended a final dividend of 71 Singapore cents per ordinary share, bringing total dividend for 2025 to S$1.56, a payout ratio of approximately 50%.
It comes as UOB reported a 7% fall in fourth-quarter net profit as net interest income moderated amid margin headwinds.
Earnings for the three months ended December were S$1.41bil, down from S$1.52bil a year earlier.
The figure missed analysts’ forecast of S$1.44bil in a Bloomberg poll.
UOB shares fell after the news, with the stock down 4.4% or S$1.70 to S$37.09. DBS shares dropped 0.7% to S$57.72, while OCBC fell 1.4% to S$21.38.
UOB said net fee income delivered broad based growth of 10% year-on-year, while other non-interest income fell 28% on lower trading and investment income.
Total expenses declined 3% from disciplined spending while total allowances halved due to lower specific allowance.
The group’s performing loans coverage was stable at 1%.
Non-performing loan ratio stood at 1.5%, with non-performing assets coverage adequate at 97% or 254% after taking collateral into account.
For 2025, net profit was S$4.7bil, a 23% drop from S$6.05bil a year ago, beating a Bloomberg forecast of S$4.64bil.
UOB said the drop in earnings was largely due to the pre-emptive general allowances that the group proactively set aside in the third quarter to strengthen provision coverage amid growing macroeconomic uncertainties.
Allowances for credit and other losses had more than quadrupled to S$1.36bil in the third quarter, from S$304mil in 2024.
For 2026, UOB guided for full-year net interest margin of 1.75% to 1.80%, low single-digit loan growth and high single-digit fee growth.
It also expects low single-digit operating cost growth and total credit costs at 25 to 30 basis points.
UOB deputy chairman and chief executive Wee Ee Cheong said in a statement: “The group delivered a resilient full-year performance, fuelled by strong fee momentum across our diversified business franchise.
“Our balance sheet is strong with robust capital and liquidity and stable asset quality.”
He noted that Asean’s growth trajectory remains intact and the group is seeing steady momentum across its business lines.
UOB’s results followed that of DBS Group which posted a 10% year-on-year fall in fourth-quarter net profit as sharply lower interest rates and a stronger Singapore dollar hit loan margins.
Furthermore, OCBC is set to report its earnings on Feb 25. — The Straits Times/ANN
