UOB net profits jump 40% to S$4.075b in 2021
Wealth management and loan fees hit record highs.
UOB’s net profits jumped 40% to S$4.075b (US$3.03b) in 2021, almost double its S$2.92b profits the previous year, according to its latest bourse filing.
This is on the back of stronger income growth and lower credit allowance, UOB reported.
With this, the bank’s directors recommend the payment of a final tax-exempt dividend of 60 cents per ordinary share for the financial year ended 31 December 2021, almost double the final dividend of 39 cents in 2020.
UOB’s net interest income inched up 6% to S$6.39b (US$4.75b), led by healthy loan growth of 10% with net interest margin being stable.
The group’s asset quality also remained resilient, with the non-performing loan (NPL) ratio steady at 1.6% as at 31 December.
The group said that it continued to maintain performing loans coverage prudently at 1%. Total allowance declined 58% to S$657m (approximately US$488.3m) and total credit costs on loans decreased from 57 basis points (bp) to 20 bp.
Net fee and commission income rose 21% to a record of $2.41b (US$1.79b). Loan fees hit a new high of S$698m (around US$518.1m) as trade and investment transactions reportedly picked up momentum.
The bank’s wealth management fees continued to rise, hitting a record total of S$823m (US$611.7m) in 2021. Stronger financial market activity also led to higher fund management fees, whilst credit card fees recovered from a pick-up in consumer spending, according to UOB.
However, lower non-customer trading income as there were larger gains from bond sales and unrealised gains on hedges last year amid the lower interest environment offset customer-related treasure income growth. This led to other non-interest income declining by 13% to $990m (US$735.8m) in 2021.
The group’s total expenses increased by a marginal 3% to S$4.31b (around US$3.2b), whilst the cost-to- income ratio for the year improved 1.5% points to 44.1%.
(US$1 = S$1.35)