UOB profit up 8% to $770m in Q1

The earning boost came from strong income figures which hit $1.77b.

UOB opened the year on strong financial footing as profits rose 8% YoY and 15% QoQ to $770m (S$1.05b) in Q1, according to its financial statement.

The bank’s strong quarterly earnings were driven by robust income figures which rose 9% to $1.77b (S$2.41b) supported by a recovery in trading and investment income and healthy loan growth. Net interest income rose 8% to $1.17b (S$1.59b) in Q1 thanks to healthy expansion of the bank’s loan books at 12%.

However, net interest margin (NIM), a common measure of profitability, narrowed by 5 bp to 1.79%. Net fee and commission income also fell 7% to $351.5m (S$479 m) due to lower wealth management and fund management fees, which was partially offset by higher loan-related and credit cards fees, which grew 9% and 7% respectively. Other non-interest income rose 40% to $249.49m (S$340m) on improved customer-related income and higher trading income.

Total expenses also rose 9% to $790m (S$1.07b) on the back of staff costs and IT-related expenses.

Across business segments, retail income rose 4% to $730m (S$1b); wholesale banking income rose 14% to $750m (S$1.02b) and global markets income grew 1% to $105.67m (S$144m).

UOB maintained a strong balance sheet in Q1 with the non-performing loan ratio (NPL) holding steady at 1.5% and non-performing assets at 89%. Total allowances for non-impaired assets hit $1.47b (S$2b) as of end-March. The bank’s Common Equity Tier 1 CAR also remained strong at 13.9%.

Rival lender DBS earlier announced profit results with Q1 earnings rising 9% to $1.21b (S$1.65b).