Saturday, 20 April 2024

UOB’s core net profit rose 26% to $4.5B in 2023

5 min read

UOB Group reported a record core net profit of SGD 6.1 billion ($4.5 billion), up 26%, for the financial year ended 31 December 2023 (FY23). Including the one-off Citigroup integration costs, net profit was at SGD 5.7 billion ($4.2 billion), also a record high.

The board recommended the payment of a final dividend of SGD 0.85 ($0.63) per ordinary share. Together with the interim dividend of 85 cents ($0.63) per ordinary share, the total dividend for FY23 will be SGD 1.70 ($1.27) per ordinary share, representing a payout ratio of approximately 50%.

In FY23, the group’s core net profit grew 26% and crossed the SGD 6 billion ($4.46 billion) mark for the first time to a new high of SGD 6.1 billion ($4.5 billion), driven by strong income growth and an enlarged customer franchise. Net interest income rose 16% to SGD 9.7 billion ($7.2 billion), on the back of strong margin expansion of 23 basis points and a loan growth of 2% in constant currency. Net fee income grew 4% to SGD 2.2 billion ($1.6 billion), led by higher credit card and wealth fees, although this was moderated by softer loan-related fees. Asset quality remained stable with non-performing loan (NPL) ratio at 1.5%.

Group wholesale banking income grew 14% to SGD 7.1 billion ($5.2 billion), led by strong growth in the transaction banking business, which now accounts for more than half of the group wholesale banking income. Cross-border income also did well, rising 9% from 2022 levels.

Group retail income increased 36% to SGD 5.5 billion ($4.09 billion), led by a strong increase in net interest income. Credit card fees surged 66% to a new high of SGD 382 million ($284 million), underscored by higher customer spending and an expanded regional franchise. Amid cautious investor sentiment, wealth management income rose 13%, supported by our growing bancassurance market share and a pick-up in demand for fixed income products. Despite market volatility, strong net new money inflows of SGD 22 billion ($16.3 billion) grew assets under management from affluent customers to SGD 176 billion ($131 billion). As of the end of 2023, our retail customer count surpassed eight million, with about one million organic new-to-bank customers. More than half of these new-to-bank customers were acquired digitally.

The group continued to make good progress on its sustainability agenda in 2023. In October, it set up the Sustainability Advisory Panel comprising three independent industry experts to advise the board and management on UOB’s sustainability strategy, targets and initiatives. The group’s sustainable financing portfolio reached SGD 44.5 billion ($33.1 billion) in FY23. The group will continue to work closely with its customers to support them on their transition to a low-carbon economy.

One-off bonus payment for junior employees

In line with the latest recommendations by Singapore’s National Wages Council to help employees cope with the rising costs of living, UOB will provide its junior employees, Class II officers and below, an extra month of bonus on a one-off basis. This additional bonus will be paid to about 6,000 employees across the group, of which about 600 are in Singapore. The group is committed to ensuring that the wage structure of its employees is fair and competitive, complemented by a comprehensive range of perks and benefits that are sustainable for the long-term, including enhanced medical support, training programmes and more.

Wee Ee Cheong, deputy chairman and CEO of UOB, said: “The group delivered a record core net profit for the year, fuelled by strong income growth through a diversified business franchise even as we strengthen our balance sheet. We remain prudent in maintaining ample liquidity and funding while we continue to invest to seek quality and resilient growth.

“Global economic outlook remains uncertain in the near term, but Southeast Asia continues to be a bright spot. We are optimistic about ASEAN’s potential, driven by improved domestic demand, robust tourism recovery and strong investment flows into the manufacturing sector as companies reconfigure their supply chains. Our strong franchise across ASEAN positions us well to capture opportunities in the region.

“Our Citigroup integration is on track. We have successfully integrated our Citigroup portfolios in Malaysia and Indonesia, with Thailand and Vietnam following suit in the coming months. With our strengthened market position and larger regional franchise, we will focus on enhancing our offerings and capabilities as we serve our expanded customer base.”

Re-disseminated by The Asian Banker

Diary of Activities
Finance Vietnam 2024
18 July 2024
Finance Thailand 2024
25 July 2024