You are here

UOB posts 6.2% drop in Q4 profit

Friday, February 17, 2017 - 08:13

37504084 - 18_02_2016 - pixbanks.jpg
UOB Group on Friday reported a net profit of S$739 million, 6.2 per cent below that a year ago, as stable loan growth was offset by a decline in net interest margin and lower gains from the sale of investment securities.

UOB Group on Friday reported a net profit of S$739 million, 6.2 per cent below that a year ago, as stable loan growth was offset by a decline in net interest margin and lower gains from the sale of investment securities.

UOB increased its specific allowance on loans by S$313 million to S$428 million due to non-performing loans (NPL) in the oil and gas and shipping industries.

But it reduced its total allowance by 31.4 per cent to S$131 million because of lower specific allowance on other assets and a release in general allowance.

"Global uncertainty, slow growth and rapid digital transformation will continue in 2017," said UOB deputy chairman and CEO Wee Ee Cheong. "However, Asia with its increasing integration and consumer affluence presents opportunities for long-term players such as UOB."

During the quarter, net interest income stood at S$1.28 billion, with strong loan growth offset by a 10 basis-point decrease in net interest margin to 1.69 per cent.

Non-interest income decreased 6.3 per cent to S$753 million on the back of lower trading and investment income. However, fee and commission income grew 10.6 per cent to S$531 million, fuelled by higher credit card and wealth management fees.

For the full year, net profit was 3.5 per cent lower from a year ago at S$3.1 billion, as a rise in expenses offset the growth in total income.

A 0.2 per cent rise in total income for the year to S$8.06 billion was led by a rise in net interest income on the back of healthy loan growth in the consumer and non-bank financial institution customer segments, partially offset by trading and investment income on lower gains from the sale of investment securities.

UOB's NPL ratio was 1.5 per cent as at Dec 31, 2016, a 0.1 percentage-point improvement over the previous quarter. Customer deposits grew 6.1 per cent over the year to S$255 billion.

Powered by GET.comGetCom