UOB Group (UOB) posted SGD 1.5 billion ($1.095 billion) in core net profit for the third quarter of 2023 (3Q23), up 5% year on year (YoY). The resilient performance was driven by strong income growth from higher net fee income and net interest income.
The group’s 3Q23 performance was supported by its diversified growth drivers across wholesale and retail businesses. Net fee income grew 14% YoY to SGD 591 million ($431 million), led by higher credit card fees, wealth management fees as well as loan-related fees. Credit card fees almost doubled to a record high of S$104 million as consumer confidence continued.
Net interest margin expanded 14 basis points, driving net interest income up by 9% YoY. Other non-interest income rose 1% YoY as higher customer-related treasury income was moderated by lower valuation on investments due to a volatile market.
On a quarter-on-quarter (QoQ) basis, net interest margin moderated as liquidity surplus was deployed into high-quality, lower-yielding assets. Customer-related treasury income grew 9% QoQ.
Credit costs in 3Q23 improved 11 basis points from last quarter to 19 basis points, with non-performing loan (NPL) ratio stable at 1.6%. The Group’s balance sheet remained robust with healthy liquidity and Common Equity Tier 1 (CET1) ratio at 13.0%.
Mr Wee Ee Cheong, UOB’s Deputy Chairman and Chief Executive Officer, said, “The global economy remains uncertain and recent geopolitical tensions have added to market volatilities. At UOB, we have a resilient portfolio that allows us to ride through market cycles. Our core businesses performed well, with higher net interest income and record credit card fees.
Our Citigroup integration is on track. Integration for Indonesia, Thailand and Vietnam is progressing as planned after we successfully migrated all Citigroup customers in Malaysia to our platform.
The macroeconomic environment could remain bumpy. However, we expect the ASEAN region to stay resilient. Consumer sentiments remain strong and rising investment flows into the region will bolster growth.
For UOB, our strong balance sheet, backed by diversified revenue drivers, will help smoothen the ride ahead and we stand ready to support our customers in these uncertain times.”
Re-disseminated by The Asian Banker