SINGAPORE: UOB’s third-quarter net profit jumped 182% to S$1.25bil from S$443mil a year earlier, largely due to a sharp drop in provisions for potential loan losses, the bank says.
UOB set aside S$258mil for credit and other losses in the three months ended Sept 30, down 81% from S$1.36bil a year earlier.
Compared with the previous quarter, its net profit fell 15% from S$1.48bil. It also missed the S$1.38bil forecast among six analysts polled by Bloomberg.
Net interest income, which measures the difference between what a bank earns from lending and pays on deposits, rose 1% year on year to S$2.28bil.
Net fee income in the third quarter hit a record S$733mil, a 19% increase from the same period a year ago. It also marked a 10% increase over the previous quarter.
This rise came on the back of strong growth in wealth, cards and loan-related activities, UOB noted.
Customer-related treasury income also reached a new high, reflecting robust client engagement and demand for hedging solutions, it added. Meanwhile, assets under management grew by 3% over the same quarter last year to reach S$204bil.
UOB chief executive officer and deputy chairman Wee Ee Cheong said: “The group continued to see healthy customer activity across our businesses this quarter, with strong growth in wealth management, healthy loan growth and record fees and customer-related treasury income.”
For the first nine months of 2026, wealth income rose 13% from a year ago, while card income was up 25% year-on-year.
Wholesale banking loans grew 9% year-on-year, with trade loans recording a robust 31% growth. Transaction banking also remained an important driver of the franchise’s performance, UOB said.
In the third quarter, net interest income remained stable at S$2.3bil, a 1% increase year-on-year, as sustained loan growth offset margin pressures.
Total expenses fell to S$1.6bil, a 4% decrease over the previous quarter, in line with income moderation.
Wee said this financial performance reflected the strength of the bank’s diversified franchise and customer relationships, with over eight million customers in the region.
“As connectivity across Asean strengthens, customers increasingly value banking partners that can support them across their business, personal and wealth needs,” he said.
“We are broadening our wealth franchise and strengthening our wholesale banking capabilities to support our customers’ growth and capture cross-border opportunities.”
He added that backed by a strong balance sheet, UOB will continue to invest for the long term. “We see significant opportunities ahead and are confident in the group’s long-term prospects.”
This strong performance comes as the shares of all three local banks: UOB, DBS and OCBC fell on Monday, as analysts projected that wealth management fees at Singapore banks could ease in the third quarter.
This followed a strong showing in the three months before, even as pressure on net interest margins persisted.
UOB shares closed at S$40.46 on Tuesday.
Analysts also said that investors are expected to scrutinise the banks’ exposure to artificial intelligence-related financing.
They are also looking out for the impact of rising bond yields on investment portfolios and capital positions.
Another issue that has come under the spotlight is the banks’ role in financing firms related to the haze that blanketed Singapore and the region in October.
On Oct 28, the Monetary Authority of Singapore (MAS) said that banks should review their financing relationships with customers who are linked to activities contributing to transboundary haze.
This includes limiting their exposure or cutting ties with those found to have clearly breached environmental laws.
According to research by environmental coalition Forests & Finance, Singapore’s three local banks have provided billions of dollars in historical financing to major palm oil and forestry groups since 2010, including some that were named in recent probes into the sources of transboundary haze.
The three banks said they uphold a zero-tolerance policy towards clients engaging in activities such as deforestation and open burning. MAS added that it supports the local banks’ clear stance against burning practices, and noted that the banks will take strong action where needed. — The Straits Times/ANN
