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03-05-2013, 07:53 AM
The Straits Times
www.straitstimes.com
Published on May 03, 2013
UOB's Q1 gains rise by 4.9% to record $722m
By Yasmine Yahya
UNITED Overseas Bank surpassed analyst forecasts yesterday by posting record earnings for the first three months of the year despite higher costs and lower interest income.
The bank said its net earnings for the first quarter rose 4.9 per cent from the same period a year ago to $722 million, bolstered by strong growth in its loans book and fee income, which also hit a new record.
Gross customer loans of $167 billion as of March 31 were 13.3 per cent higher than in the first quarter of last year.
Loans originating from Singapore increased by 15.5 per cent to reach $110 billion during the first quarter, while the regional countries' loan base grew 9.7 per cent to $47.8 billion.
Customer deposits were 11.7 per cent higher from a year ago at $188 billion as of March 31.
Fee and commission income, meanwhile, rose 25.2 per cent to a record $453 million for the quarter.
"Continued efforts to boost fee income to mitigate effects of margin pressure paid off," the bank noted in a statement posted on the Singapore Exchange yesterday.
"The sterling performance in fee income was underpinned by strong growth in lending, fund management, capital market and wealth management businesses."
The robust growth in fee income and loans helped offset a drop in trading and net interest income as well as higher expenses.
Net interest income fell 3.5 per cent from a year ago to $964 million, due to a decrease in asset yields.
Net interest margin was also lower at 1.7 per cent, against 1.98 per cent a year ago.
Trading and investment income was 22 per cent lower from a year ago, at $158 million, due to lower gains made on the sale of securities.
Operating expenses crept up 2.9 per cent to $696 million, due to higher staff costs.
Total impairment charges rose 22.8 per cent to $130 million, as more collective impairment was set aside on higher loans growth.
UOB's net profit beat forecasts by analysts polled by Reuters, who on average predicted the bank would report earnings of $666 million.
"Despite this strong start, we are mindful that overall growth is expected to moderate this year," said chief executive Wee Ee Cheong. Within Asia, especially South-east Asia, business and economic fundamentals remain sound and UOB will continue to have ample liquidity as it faces intense competition, he added.
"Given our balance sheet strength, we are well-positioned to navigate the changing landscape, even as Basel III implementation kicks in this year."
Basel III refers to a set of regulations that require banks to boost their capital base in order to guard against collapse when faced with a shock event.
"With our regionalisation initiatives on track, we remain confident of furthering our regional wholesale and wealth management business," Mr Wee said.
yasminey@sph.com.sg
www.straitstimes.com
Published on May 03, 2013
UOB's Q1 gains rise by 4.9% to record $722m
By Yasmine Yahya
UNITED Overseas Bank surpassed analyst forecasts yesterday by posting record earnings for the first three months of the year despite higher costs and lower interest income.
The bank said its net earnings for the first quarter rose 4.9 per cent from the same period a year ago to $722 million, bolstered by strong growth in its loans book and fee income, which also hit a new record.
Gross customer loans of $167 billion as of March 31 were 13.3 per cent higher than in the first quarter of last year.
Loans originating from Singapore increased by 15.5 per cent to reach $110 billion during the first quarter, while the regional countries' loan base grew 9.7 per cent to $47.8 billion.
Customer deposits were 11.7 per cent higher from a year ago at $188 billion as of March 31.
Fee and commission income, meanwhile, rose 25.2 per cent to a record $453 million for the quarter.
"Continued efforts to boost fee income to mitigate effects of margin pressure paid off," the bank noted in a statement posted on the Singapore Exchange yesterday.
"The sterling performance in fee income was underpinned by strong growth in lending, fund management, capital market and wealth management businesses."
The robust growth in fee income and loans helped offset a drop in trading and net interest income as well as higher expenses.
Net interest income fell 3.5 per cent from a year ago to $964 million, due to a decrease in asset yields.
Net interest margin was also lower at 1.7 per cent, against 1.98 per cent a year ago.
Trading and investment income was 22 per cent lower from a year ago, at $158 million, due to lower gains made on the sale of securities.
Operating expenses crept up 2.9 per cent to $696 million, due to higher staff costs.
Total impairment charges rose 22.8 per cent to $130 million, as more collective impairment was set aside on higher loans growth.
UOB's net profit beat forecasts by analysts polled by Reuters, who on average predicted the bank would report earnings of $666 million.
"Despite this strong start, we are mindful that overall growth is expected to moderate this year," said chief executive Wee Ee Cheong. Within Asia, especially South-east Asia, business and economic fundamentals remain sound and UOB will continue to have ample liquidity as it faces intense competition, he added.
"Given our balance sheet strength, we are well-positioned to navigate the changing landscape, even as Basel III implementation kicks in this year."
Basel III refers to a set of regulations that require banks to boost their capital base in order to guard against collapse when faced with a shock event.
"With our regionalisation initiatives on track, we remain confident of furthering our regional wholesale and wealth management business," Mr Wee said.
yasminey@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
