UOB Group reported a core net profit of SGD 3.1 billion ($2.3 billion) for the first half of 2023 (1H23), an increase of 53% year-on-year (YoY), supported by robust earnings growth across its diversified business franchise. Including the one-off Citigroup integration expenses, net profit was SGD2.9 billion ($2.1 billion).
The board declared an interim dividend of 85 cents ($0.64) per ordinary share, representing a payout ratio of approximately 49%. This is also 42% higher than the interim dividend last year.
Core net profit for the second quarter of 2023 (2Q23) was 35% higher at SGD1.5 billion ($1.1 billion) compared with a year ago. Net interest income for the quarter grew 31%, while other non-interest income rose sharply on higher customer-related treasury income and strong performance from trading and liquidity management activities. Net profit for 2Q23 was SGD 1.4 billion ($1 billion) when one-off Citigroup integration expenses were included.
Asset quality remained stable with non-performing loan ratio at 1.6%. Credit costs were at 30 basis points. Outside of a specific exposure, credit costs remained stable. The group continues to maintain healthy provision buffers to cushion against uncertainties.
In 1H23, group wholesale banking income increased by 24% YoY to SGD 3.6 billion ($2.7 billion) as the group continues to focus on good quality credits. Loans rebounded with quarter-on-quarter growth of 2%, supported by trade and event-driven loans to existing clients. Cross-border income grew 17% YoY on the back of the group’s strength in connectivity despite macroeconomic uncertainties. Transaction banking income now accounts for 53% of total wholesale banking income.
Group retail’s income in 1H23 rose 58% from a year earlier to SGD 2.7 billion ($2 billion). Credit card fees remained strong, backed by a sustained consumer spending momentum as well as the consolidation of our Citigroup portfolio. The group’s retail deposits grew 20% compared with last year. The group continues to see positive net new money inflows of SGD 12 billion ($ 9 billion) year to date, which brought total assets under management to SGD 165 billion ($123.9 billion), 19% higher than a year ago.
Wee Ee Cheong, deputy chairman and CEO of UOB, said: “We have delivered a commendable set of results for the first half of the year, with record core net profit driven by strong net interest income and trading and investment income. Backed by our strong balance sheet, we see continued momentum in our client franchise expansion."
Cheong said: “While the global outlook remains uncertain, we expect the Asean region to stay relatively resilient. Growth will be supported by a more moderate interest rate environment in this region and a pick-up in tourism and demand for services."
“Our Citigroup acquisition is progressing well. Our strengthened market position and customer base open up more opportunities for global partnerships and enhanced offerings for our customers. Amid these uncertain times, we are committed to supporting our customers and to delivering value to our stakeholders. We remain focused on investing and building our regional franchise for the long term,” he added
Re-disseminated by The Asian Banker