By Kevin Lim
SINGAPORE (Feb 14) -- United Overseas Bank, the smallest of Singapore's three banking groups, reported on Wednesday a 16% rise in fourth quarter net profit as loans and fee income increased.
UOB earned 855 million Singapore dollars ($646 million) in the three months ended December, up from S$739 million in the same period of 2016. Its earnings were, however, lower than the median estimate of S$906 million in a Reuters poll.
The bank's net interest income rose 15% to S$1.46 billion, helped by higher loan volumes and as net interest margin improved 12 basis points to 1.81%.
UOB raised specific allowance for loans that had been made to the shipping and oil and gas sector, but this was offset by a reversal of excess general allowance on loans.
Fee and commission income increased 10% to S$585 million as a result of strong growth in the wealth management, fund management and credit card businesses, while trading and investment income increased 18% to S$198 million.
For the full year, UOB posted a net profit of S$3.39 billion, a rise of 9% over 2016.
"Despite headwinds in the last couple of years, particularly in the oil and gas sector, our balance sheet remains strong, with robust capitalisation and reserves buffer as well as ample liquidity," deputy chairman and CEO Wee Ee Cheong said in a statement.
"With the improving outlook across the region, our customers are stepping up on their regional expansion plans and expect further growth in their personal wealth," he added.
UOB raised its final dividend to 45 Singapore cents from 35 cents and said it will pay a special dividend of 20 cents, following DBS Group Holdings which doubled its final dividend and announced a special dividend last week.
- By Kevin Lim; Kevin.Lim@nikkeinewsrise.com; +65 6331 6250
- Edited by Sumathi Vaidyanathan
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