Trading and investment income assists UOB 1Q15 profit growth
(5 May 2015 – Singapore) United Overseas Bank (UOB)’s operating profit for the first-quarter 2015 grew 10.7 percent from a year earlier to SG$1.10 billion (A$1.05 billion), with steady contributions across core income streams.
Net earnings were 1.6 percent higher year-on-year at SG$801 million.
Net interest income trended upward by 8.3 percent from a year ago to SG$1.20 billion, mainly driven by loan growth and higher interest margins.
The net interest margin increased 3 basis points to 1.76 percent in 1Q15, which UOB said was led by improved loan pricing and higher securities yield.
Non-interest income registered a double-digit growth of 17.5 percent year-on-year to SG$755 million in 1Q15.
Fee and commission income recorded a broad-based growth of 9.5 percent from a year ago to SG$453 million.
Trading and investment income grew 50.6 percent year-on-year to SG$225 million, led by higher gain on investment securities as well as treasury customer income.
Operating expenses increased 12.9 percent from a year ago to SG$852 million mainly due to higher staff costs, revenue and IT-related expenses to support the Group's continued efforts in deepening customer franchise and enhancing technology capabilities.
Expense-to-income ratio was stable at 43.6 percent in 1Q15.
Total loan charge-off rate remained at 32 basis points, while total impairment charges of SG$169 million was 7.6 percent higher than a year ago on the back of a larger loan book.
Contribution from associates' profits decreased from SG$43 million in 1Q14 to SG$4 million in 1Q15 due to divestment gain in the prior period.
Tax expenses were 49.7 percent higher than the same quarter last year at SG$133 million due to higher write-back of prior years' provision in 1Q14.
The Group's funding position remained strong with customer deposits expanding 10.5 percent from a year ago to SG$239 billion as at 31 March 2015.
Compared with the previous quarter, customer deposits continued to grow 2.4 percent mainly led by US-dollar deposits.
Total and SGD loan-to-deposit ratios remained healthy at 83.4 percent and 94.5 percent respectively as at 31 March 2015.
Group non-performing loan (NPL) ratio stayed stable at 1.2 percent with a strong NPL coverage at 147.0 percent.
Subscribe