Sunday, 19 September 2021

UOB's 1H 2021 net profit increased 29% to $1.4 billion on strong customer franchise and stabilising credit outlook

UOB Group reported a 29% increase in net earnings to  $1.4 billion (SGD 2.0 billion) for the first half of 2021 (1H21) compared with a year ago, supported by its strong customer franchise and lower credit allowance as more economies reopened during the period.

Net earnings for the second quarter of 2021 (2Q21) stood at S$1.0 billion, a year-on-year jump of 43%.

Despite the uneven economic recovery across markets, UOB’s proactive and focused approach to supporting customers in their business and investment needs continued to reap positive results. Loans in 1H21 grew 6% year on year, while fee income rose 28% on the back of strong wealth management, loan-related and fund management performance.

Group Wholesale Banking’s revenue grew 5% to a record SGD 2.1 billion, with cross-border income up 5%. The increase was driven by the demand for financial solutions from large corporate and institutional clients, especially in Singapore, Greater China and developed markets, that are seeking cross-border trade and investment opportunities across the region. With more companies adopting sustainable business practices, their demand for sustainable financing also grew. The Group extended a total of S$13 billion in sustainable financing to its clients as at 30 June 2021.

Group Retail ’s revenue was up 1% to SGD 2.1 billion, despite a decline in net interest income. In 1H21, wealth management fees rose 32% and assets under management (AUM) from high affluent customers increased 7% to SGD 37 billion. The Group is also steering wealth to sustainable investments. As at 30 June 2021, total AUM in environmental, social and governance-focused investments was S$5.7 billion.

Overall asset quality remained resilient as the non-performing loan (NPL) ratio was stable at 1.5%. With strong pre-emptive general allowances taken previously, total credit costs normalised downwards to 24 basis points.

The Monetary Authority of Singapore lifted the dividend cap recently. Together with strong earnings and capital position, the Board declared an interim dividend of 60 cents per ordinary share. This translates to a dividend payout ratio of 50%. Post dividend, the Group’s balance sheet remains in a solid position. UOB Group will continue to see customers through to better times.

CEO Statement

Mr Wee Ee Cheong, Deputy Chairman and Chief Executive Officer, UOB, said, “Our diversified customer franchise and investment in digital capabilities have enabled us to deliver another strong set of results. We achieved a 29 per cent increase in 1H21 profit, driven by healthy contributions from our core businesses and resilient asset quality. Our performance was underpinned by our proactive and focused support for our customers in their businesses and investments.

“Our robust balance sheet and strong capital and liquidity positions also enable us to support our customers in capturing new opportunities arising from the growth momentum in Greater China and developed markets. We are accelerating our digital agenda to provide progressive solutions in anticipation of their business and personal financial needs. With countries speeding up their vaccination drive, we are optimistic that the situation will gradually pick up in Southeast Asia. In forging a sustainable future with our customers across the region, we remain committed to working with governments across the region to provide affected customers, especially small- and medium-sized enterprises, with liquidity support to see them through these tough times.”

 

Re-disseminated by The Asian Banker

Diary of Activities
Finance Thailand 2021
19 October 2021