On May 7, UOB deputy chairman and CEO Wee Ee Cheong acquired 100,000 shares at an average price of S$34.48 per share. This raised his direct interest to 0.36 per cent, and total interest from 10.75 per cent to 10.76 per cent.

 

This followed the group reporting a net profit of S$1.49 billion for its Q1 FY25 driven by broad-based growth, highlighted by record fee income and strong loan growth.

 

Wee highlighted that China-Asean and intra-Asean trade flows continue, driven by growing client demand for hedging and a healthy pipeline of infrastructure financing. He also noted that the group will resume FY25 guidance once the situation stabilises and remains committed to the S$3 billion capital distribution plan.

The bank&rsquo s Q1 net profit of S$1.49 billion is unchanged from the year-ago period

 

[SINGAPORE] A strong balance sheet and capital base will help UOB : U11 -1.4% navigate the uncertainties arising from US tariffs, said deputy chairman and chief executive officer Wee Ee Cheong.

 

Speaking at the bank&rsquo s first-quarter earnings call on Wednesday (May 7), he noted that trade forms only about 10 per cent of the bank&rsquo s total loans portfolio, limiting its direct exposure.

 

&ldquo In fact, most of our trade finance lending continues to be done within the region, reflecting strong intra-regional activities,&rdquo he said, noting that 80 per cent of the bank&rsquo s trades are &ldquo domestic business intra-region&rdquo .

 

He was referring to UOB&rsquo s S$3 billion capital distribution plan, announced in February, which will proceed as planned.

 

The bank also said on Wednesday that it will halt its 2025 earnings guidance, and plans to resume this once the macroeconomic situation stabilises.

 

Group chief financial officer Leong Yung Chee added that while the pandemic caused a &ldquo sudden shutdown&rdquo in some industries, the current situation was more of a &ldquo slowdown&rdquo and adjustment of supply chains, with some potential cost increases.

 

&ldquo You would see a period of volatility and adjustments, but I think the severity is... going to be moderated over time,&rdquo said Leong, who took on his current role in April.

 

On trade, the &ldquo first-order impact&rdquo from US tariffs has been assessed through a portfolio analysis, Wee said.

 

While some customers have between 20 and 40 per cent of their exports going to the US, the analysis found that this was &ldquo not really a major concern&rdquo for the bank.

 

The greater severity lies in the &ldquo second-order impact&rdquo &ndash a potential drop in consumer confidence triggered by tariff uncertainties &ndash though the extent of this is still unfolding.

 

&ldquo If the uncertainty continues, then it will affect consumer confidence,&rdquo Wee said. &ldquo This is where the slowdown in the economy will come in.&rdquo

 

Flat Q1 profit

 

The bank on Wednesday reported a net profit of S$1.49 billion for the first quarter ended Mar 31, 2025, unchanged from a year ago, and below the S$1.54 billion consensus forecast in a Bloomberg survey of five analysts.

 

Net interest income rose 2 per cent to S$2.41 billion, driven by strong loan growth, though net interest margin (NIM) edged down to 2 per cent from 2.02 per cent the year before.

 

Net fee income jumped 20 per cent to S$694 million, supported by robust loan-related and wealth activities other non-interest income fell 5 per cent to S$554 million on lower trading and investment income.

 

UOB&rsquo s non-performing loans ratio rose slightly to 1.6 per cent from 1.5 per cent, while credit costs climbed to 35 basis points (bps) in Q1, from 25 bps in Q4, as the bank set aside more pre-emptive allowances.

 

&ldquo With credit costs rising over 50 per cent (against Q1 2024) to boost provision coverage, the bank has sufficient buffers to guard against further asset-quality slippage,&rdquo said Bloomberg Intelligence analysts Sarah Mahmud and Diksha Gera in a note.

 

&ldquo Though lending could slow with new US tariffs, UOB&rsquo s wide South-east Asian footprint positions it well to serve businesses as supply chains shift,&rdquo they added.

 

Jefferies equity analysts Sam Wong, Chen Shujin and Joanna Cheah described the bank&rsquo s results as &ldquo broadly in line&rdquo with consensus, though &ldquo marginally below&rdquo their firm&rsquo s forecasts.

 

Key positives from the Q1 results included strong non-interest income growth, stable quarter-on-quarter NIM and cost control, with operating expenditure unchanged from the same period the year before, the analysts said.

 

UOB is the first of Singapore&rsquo s three local banks to report Q1 earnings DBS and OCBC are set to release their results on Thursday and Friday, respectively.

Bank will resume guidance once macroeconomic situation stabilises

 

[SINGAPORE] Singapore&rsquo s third-largest lender UOB : U11 -1.4% will suspend its 2025 earnings guidance, with plans to resume this once the macroeconomic situation stemming from US tariffs stabilises.

 

At the same time, the bank remains &ldquo committed&rdquo to its three-year, S$3 billion capital return plan, deputy chairman and chief executive officer Wee Ee Cheong said at the bank&rsquo s first-quarter earnings call on Wednesday (May 7).

 

The S$3 billion package, first announced in February, comprises special dividends and a S$2 billion share buyback programme, where shares will be acquired from the open market and cancelled.

 

Responding to a question on whether the bank might consider cutting dividends, Wee said it was &ldquo too premature&rdquo for such a move.

 

&ldquo It is still a very fluid situation, and the impact is too early to quantify,&rdquo he said, referring to US tariffs.

 

Brief fall

Jefferies equity analysts Sam Wong, Chen Shujin and Joanna Cheah warned in a Wednesday note that the market could &ldquo react negatively&rdquo to the bank&rsquo s suspension of guidance for 2025.

 

Shares of UOB fell as much as 2.8 per cent &ndash the steepest drop since Apr 28 &ndash before paring losses and closing 1.4 per cent lower at S$34.49.

 

However, Bloomberg Intelligence analysts Sarah Mahmud and Diksha Gera noted: &ldquo UOB&rsquo s suspension of 2025 guidance isn&rsquo t a surprise amid a global-growth slowdown.&rdquo

 

The &ldquo overarching sentiment&rdquo among the bank&rsquo s clients is one of uncertainty, said UOB&rsquo s group chief financial officer Leong Yung Chee.

 

&ldquo I think there&rsquo s a lot of uncertainty and inability to project forward,&rdquo Leong said. &ldquo Even if you look at some of the global companies &ndash whether it&rsquo s Apple, General Motors, Amazon, JPMorgan &ndash everyone is suspending guidance, because their visibility today is not easy.&rdquo

 

In the face of these uncertainties, the bank is focusing on strengthening its balance sheet and assisting clients in navigating the situation, Leong added.

 

This includes supporting clients through possible trade flow and supply chain shifts, with the bank&rsquo s front-line staff &ldquo very actively engaging&rdquo them.

 

At its fourth-quarter results in February, UOB had forecast high single-digit loan growth and double-digit fee growth for 2025.

 

&ldquo We are working on the assumption today on those numbers, but those numbers will have to be revised,&rdquo Leong said. &ldquo We are not yet ready to revise those numbers.&rdquo

 

United Overseas Bank (UOB) has reported a net profit of $1.49 billion for the 1QFY2025 ended March 31, relatively unchanged from the net profit of $1.487 billion for the 1QFY2024, and lower than the estimate of $1.54 billion by the Bloomberg consensus. This was supported by broad-based income and franchise growth, as well as record fee income and higher trading and investment income. On a q-o-q basis, the bank&rsquo s net profit fell by 2% y-o-y from $1.52 billion.

 

In the 1QFY2025, net interest income (NII) rose by 2% y-o-y but fell by 2% q-o-q to $2.41 billion due to the shorter quarter.

 

Net interest margin (NIM) stood at 2%, down 0.02 percentage points y-o-y, but unchanged q-o-q. Loans rose by 6% y-o-y and 1% q-o-q thanks to wholesale growth and mortgages.

 

The bank&rsquo s net fee income surged to a new high of $694 million, up 20% y-o-y and 22% q-o-q, due to record loan-related fees as well as healthy momentum in wealth and card fees.

 

Other non-interest income fell by 5% y-o-y but increased by 25% q-o-q to $554 million from stronger customer treasury income and good performance from trading and liquidity management activities. Trading and investment income stood at $466 million, down 12% y-o-y but up 27% q-o-q.

 

During the quarter, the bank&rsquo s non-performing loan (NPL) ratio stood at 1.6%, 0.1 percentage points higher y-o-y and q-o-q.

 

Total credit costs stood at 35 basis points, up from 20 basis points in the 1QFY2024 and 25 basis points in the 4QFY2024 with total allowance for credit and other losses stood at $290 million, up 78% y-o-y and 28% q-o-q.

 

In the same period, cost-to-income ratio stood at 42.6%, improving from 44.6% in 1QFY2024 and 45.6% in 4QFY2024.

 

The bank&rsquo s net stable funding ratio (NSFR) stood at 116%, down by 5 percentage points y-o-y and unchanged q-o-q. Its transitional common equity tier 1 (CET-1) ratio stood at 15.5%, 1.6 percentage points higher y-o-y and unchanged q-o-q. Fully-loaded CET-1 ratio stood at 15.4%.

 

Noting the group&rsquo s &ldquo solid set&rdquo of results for the first quarter, UOB&rsquo s deputy chairman and CEO, Wee Ee Cheong, warned that the bank sees a slowdown in global growth in the near-term due to macroeconomic uncertainties triggered by the US tariffs.

 

Yet, the bank remains positive on Asean&rsquo s resilience and long-term potential.

 

&ldquo The region&rsquo s competitive edge in manufacturing and commodities will ensure its relevance as global supply chains reconfigure. We expect flows within Asean and between Asean and the rest of the world to continue growing as countries seek new ways to prosper,&rdquo says Wee.

 

&ldquo With our robust balance sheet, healthy capital and strong liquidity positions, we are well-equipped to address risks and seize the right opportunities for growth. We stand ready to support our customers and community through these extraordinary times,&rdquo he adds.

 

In his CEO remarks presentation, Wee says it will resume its 2025 guidance when the situation stabilises and remains committed to its $3 billion capital distribution plan.

 

May 6, 2025