UOB reports first-quarter profit fell less than expected, maintains 2024 growth outlook

Singapore’s United Overseas Bank reported a smaller-than-expected decline in first-quarter net profit on Wednesday, squeezed by net interest margins, and maintained its outlook for income growth in 2024.

“Despite heightened geopolitical tensions, our home region of Southeast Asia is relatively resilient,” UOB CEO Wee Ee Cheong said in a statement.

“We continued to see ongoing shifts in global supply chains and sustained tourism activities,” he added.

UOB, which is also Southeast Asia’s third-largest bank by assets, also maintained its guidance for low single-digit loan growth and double-digit fee growth, according to Wee’s presentation slides accompanying the results.

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

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.

That showed up in UOB’s first-quarter results, with an 11% jump in asset under management to 179 billion Singapore dollars ($132.04 billion).

UOB’s larger peer DBS Group earlier this month posted a 15% jump in first-quarter record net profit that trumped forecasts and projected 2024 net profit to exceed last year’s record result.

Oversea-Chinese Banking Corp is due to announce its results on May 10.

UOB said its January-March net profit declined to SG$1.49 billion from SG$1.51 billion a year earlier on the back of a drop in net interest income, which was squeezed by lower margins.

This however beat the mean estimate of SG$1.43 billion from three analysts polled by LSEG.

Net interest margins, a key gauge of profitability, dropped to 2.02% in the first quarter from 2.14% in the same period a year earlier.

UOB’s first-quarter return on equity declined to 14.0%, down from 14.9% a year ago.