You are here

UOB's Q1 net earnings down 4.4% to S$766m

uob1.jpg
UOB Group on Thursday reported net earnings of S$766 million for the first quarter ended March 31, 2016 - down 4.4 per cent from S$801 million in the corresponding period a year ago.

UOB Group on Thursday reported net earnings of S$766 million for the first quarter ended March 31, 2016 - down 4.4 per cent from S$801 million in the corresponding period a year ago.

Total income rose 0.7 per cent to S$1.97 billion, mainly supported by higher net interest income.

Net interest income rose 6.1 per cent to S$1.28 billion, driven by improved net interest margin - which saw a 2 basis-point increase to 1.78 per cent - and an expanded loan base.

Non-interest income declined 8.0 per cent to S$695 million in Q1, mainly from lower wealth management fees and trading and investment income. This was attributable to softer investors' appetite due to volatile market conditions.

Total expenses increased 4.9 per cent from a year ago to S$894 million, largely from higher staff costs, revenue and IT-related expenses, as the group continued to invest in capabilities and infrastructure to strengthen customer franchise and enhance technology capabilities.

Non-performing loan (NPL) ratio remained stable at 1.4 per cent, while NPL coverage was high at 133.2 per cent, and 325.3 per cent after taking collateral into account.

Said Wee Ee Cheong, UOB's deputy chairman and chief executive officer: "While revenue has moderated in line with the slower growth environment, we continue to maintain a healthy balance sheet, with stable asset quality and strong core capitalisation. Our recent successful issuances of covered bonds and subordinated notes reflect the confidence investors have in us.

"Even as the region faces macro headwinds in the near term, we believe its economic fundamentals are largely capable of coping with bouts of market volatility. Our resilient balance sheet puts us in good stead to support our customers through economic cycles. At the same time, we stay focused on building our core franchise for the long term."