To The Moon

$UNITED OVERSEAS BANK LIMITED(U11.SI)$ United Overseas Bank (UOB) has reported a core net profit of $1.48 billion for the 3QFY2023 ended Sept 30, 5% higher y-o-y but 2% lower on a q-o-q basis. The higher y-o-y earnings was due to strong income growth from higher net fee income and net interest income (NII)

This brings the bank’s 9MFY2023 core net profit to $4.56 billion, 33% higher y-o-y.

Including the one-off integration expenses, UOB’s net profit stood at $1.38 billion for the 3QFY2023 and at $4.31 billion for the 9MFY2023.

For the 3QFY2023, the bank attributed its better y-o-y performance to its diversified growth drivers across its wholesale and retail businesses.

During the quarter, UOB’s net interest income rose by 9% y-o-y to $2.43 billion led by higher net interest margin (NIM), which increased by 14 basis points (bps) at 2.09%.

Net fee income grew by 14% y-o-y to $591 million due mainly to higher credit card fees, wealth management fees as well as loan-related fees. Credit card fees almost doubled to a record high of $104 million as consumer confidence continued.

Other non-interest income grew by 1% y-o-y to $436 million during the 3QFY2023 as higher customer-related treasury income was moderated by lower valuation on investments due to a volatile market.

As a result, total income for the 3QFY2023 rose by 9% y-o-y to $3.46 billion.

In the 3QFY2023, UOB’s cost-to-income ratio stood at 41.0%, an improvement 1.6 percentage points y-o-y and stable q-o-q.

Total credit cost on loans increased to 19 basis points on higher specific allowance, partially offset by the write-back of general allowance.

In the 3QFY2023, non-performing assets (NPA) stood at $5.19 billion.

Non-performing loan (NPL) ratio stood at 1.6%, up 0.1 percentage points y-o-y and stable q-o-q.

Specific allowance over NPA stood at 34%, up from 33% in the year and quarter before.

The bank’s loan-to-deposit ratio (LDR) stood at 82.3%.

All-currency liquidity cover ratio (LCR) stood at 153%.

Its net stable funding ratio (NSFR) stood at 121%.

Current and savings account (CASA) deposit ratio stood at 48.2% as at Sept 30.

As at Sept 30, UOB’s common equity tier 1 (CET-1) ratio stood at 13.0%, 0.2 percentage points higher y-o-y but 0.6 percentage points lower q-o-q.

“The global economy remains uncertain and recent geopolitical tensions have added to market volatilities. At UOB, we have a resilient portfolio that allows us to ride through market cycles. Our core businesses performed well, with higher net interest income and record credit card fees,” says Wee Ee Cheong, deputy chairman and CEO of UOB.

“Our Citigroup integration is on track. Integration for Indonesia, Thailand and Vietnam is progressing as planned after we successfully migrated all Citigroup customers in Malaysia to our platform,” he adds.

Looking ahead, Wee notes that the macroeconomic environment could remain “bumpy” although the bank expects the Asean region to stay “resilient”.

“Consumer sentiments remain strong and rising investment flows into the region will bolster growth,” he says. “For UOB, our strong balance sheet, backed by diversified revenue drivers, will help smoothen the ride ahead and we stand ready to support our customers in these uncertain times.”

Shares in$UNITED OVERSEAS BANK LIMITED(U11.SI)$ UOB closed 6 cents higher or 0.22% up at $27.72 on Oct 25.

@TigerEvents 

@TigerStars