UOB-Kay Hian Q4 profit up 7.4% on stronger lending activity

UOB-Kay Hian Holdings posted a 7.4 per cent increase in net profit during the fourth quarter as higher lending activity offset a decline in commission income.

Net profit attributable to shareholders in the three months ended December 2014 rose to S$19.2 million, or 2.56 cents per share. For the full 2014, net profit fell 20.3 per cent to S$74.4 million, or 10.07 Singapore cents per share.

The broker is recommending a dividend of 5 Singapore cents per share, down from the 6.5 Singapore cent per share payout a year ago.

Shares of UOB-Kay Hian gained 0.3 per cent, or half a Singapore cent, to close at S$1.485 on Tuesday before the results were announced.

Singapore market volumes remained flat in the fourth quarter, dragging commission income down 6.5 per cent to S$59 million despite significant volume increases in Hong Kong and Thailand, the broker said.

But higher lending activities led interest income to rise 29 per cent to S$32.5 million.

UOB-Kay Hian said global market sentiment remains "cautious" amid ongoing geopolitical and macroeconomic concerns.

"We expect subdued conditions in Asia for at least the first half of 2015," the company said. "Given that regional stock prices especially for the companies exposed to oil and gas, property and commodities sectors are at historic low valuations, any improvement in investor sentiment could spur transactions volumes. We are hopeful that this could occur in second half of 2015."