UOB posts small drop in quarterly profit, confident of maintaining key margin level
SINGAPORE: Singapore's United Overseas Bank (UOB) posted a smaller-than-expected 2% drop in first-quarter profit on Wednesday and said it was confident of preventing further declines in its net interest margin.

Chief Financial Officer Lee Wai Fai said Southeast Asia's third-largest bank had benefited from the U.S. Federal Reserve's decision to defer rate cuts.

Net interest margin (NIM) - a key gauge of profitability - came in at 2.02%, down from 2.14% in the same period a year earlier but steady from the fourth quarter.

"We can keep it well above 2%," Lee told a briefing. "Depending if the Fed suddenly cuts sharply, but I think with the things that are going we are actually comfortable keeping it at current level."

The drop in NIM was responsible for the decline in net profit to S$1.49 billion ($1.1 billion), though the result was better than market expectations for a 5% profit fall.

The bank also saw assets under management jump 11% from a year earlier to S$179 billion.

Singapore has in recent years benefited from strong inflows of wealth from Asia, including China, as well as Europe and the Americas, drawn in by the city-state's political stability.

UOB's return on equity, however, declined to 14.0% during the quarter from 14.9% a year ago.

UOB expects total income growth in 2024 and has predicted low single-digit percentage growth for loans and double-digit growth for fees.

The bank kept its guidance for its core cost-to-income ratio at around 41% to 42% and for credit costs to come in at the lower end of 25-30 basis points for 2024.

UOB shares dropped 1% in early trade, in line with the broader market.

Larger rival DBS this month posted a 15% jump in first-quarter net profit that trumped forecasts and projected that 2024 net profit will exceed last year's record result.

Oversea-Chinese Banking Corp is due to announce its results on May 10. - Reuters
Banking,UOB,Singapore,profit,finance
SINGAPORE: Singapore's United Overseas Bank (UOB) posted a smaller-than-expected 2% drop in first-quarter profit on Wednesday and said it was confident of preventing further declines in its net interest margin.