UOBKH stands to benefit from both the rise in foreign direct investments (FDI) into Johor, which is driving companies to raise capital and debt on the Bursa and the ongoing efforts to strengthen the Singapore equities market.

&ldquo A vibrant equities market is a major pillar of every financial centre, fuelling entrepreneurship, encouraging start-ups and venture capital, and overall economic growth,&rdquo said Koh Boon Hwee, chairman of Singapore Exchange Group, on Jan 2. UOBKH is the only listed broker on the SGX. It offers a wide range of corporate finance services, including financial advisory and investment banking, underwriting, and placement services for primary and secondary listings. UOBKH also provides a popular margin financing product.

UOB Kay Hian

	H1 FY24	H1 FY23	Y-O-Y % change
Revenue (S$m)	317.1	287.8	10.2
Net profit (S$m)	113.9	69.3	64.3
EPS (¢ )	12.64	7.83

The fine is for breaches in business conduct and anti-money laundering rules.

The Monetary Authority of Singapore has fined UOB Kay Hian Private Limited $375k for its failure to comply with business conduct requirements under the Securities and Futures (Licensing and Conduct of Business) Regulations (SFR) and anti-money laundering and countering the financing of terrorism (AML/CFT) requirements under MAS Notice SFA04-N02. 

Between September 2012 and June 2018, MAS said UOBKH failed to implement adequate control over its corporate finance business and failed to ensure that its CF business was subject to internal audit.

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Specifically, UOBKH& rsquo s internal policies failed to sufficiently involve its Compliance function in matters of compliance, thereby compromising its effectiveness. It also failed to meet the standards set out in the applicable Association of Banks in Singapore Listings Due Diligence Guidelines for internal policies and procedures on conducting due diligence for IPOs

Between December 2016 and August 2017, UOBKH also committed breaches of MAS& rsquo AML/CFT requirements, which were a result of material lapses in its control processes.

MAS said that UOBKH failed to verify customers& rsquo source of wealth (SOW) during onboarding, even though they were determined by the firm to be of higher money laundering (ML) risk. UOBKH& rsquo s practice of verifying the SOW of such customers only upon specific trigger events did not comply with AML/CFT requirements for performing enhanced customer due diligence on customers who pose higher ML risk.

UOBKH also accepted third-party receipts that represented a substantial amount of the value of an IPO without conducting adequate due diligence. As a result, UOBKH failed to detect and report suspicious transactions despite red flags of potential nominee arrangements, which may be abused to conceal beneficial ownership and facilitate market misconduct.  

& ldquo UOBKH& rsquo s breaches of AML/CFT requirements exposed it to the risk of being used as a conduit for financial crime. UOBKH has taken remedial measures to enhance its internal policies and controls. In addition, MAS has required UOBKH to appoint an independent external party to validate the implementation and effectiveness of its remediation measures and report the findings to MAS,& rdquo MAS said.

UOBKH has already paid the fine in full.

Revenue for the period comes in 10.2% higher at S$317.1 million

 

UOB Kay Hian : U10 -1.46% reported on Thursday (Aug 15) a net profit of S$113.9 million for the six months ended Jun 30, up 64.3 per cent from S$69.3 million in the previous corresponding period.

 

Revenue increased 10.2 per cent to S$317.1 million compared to S$287.8 million in the year-ago period.

 

On a per-share basis, earnings were 12.64 Singapore cents, up from 7.83 cents.

 

The brokerage firm attributed this to strong equity market performance and higher trading volumes in the US, which sustained improved investor activity for the period.

 

It also noted that there had been &ldquo considerable&rdquo interest in structured products and fixed income instruments as investor sentiment positioned for an expected rate cut in the second half of 2024.

 

Commission and trading income rose 18.8 per cent to S$166 million from S$139.8 million, while other operating income increased to S$27.3 million from S$16 million.

 

This was offset by reduced interest income, down 6.2 per cent to S$132 million, which was a result of lower income from structured loans.

 

While staff costs climbed 28.7 per cent to S$101.1 million, finance costs fell 40 per cent to S$19.1 million.

 

Other operating expenses also dropped 35.1 per cent to S$43.1 million, as other operating expenses for H1 2023 included an additional allowance for impairment of trade receivables of S$17.8 million.

 

The brokerage said it will adopt a cautious outlook for the next six to 12 months, as recent market events showed &ldquo significant volatility and investors&rsquo nervousness towards valuations and direction of US economic policies&rdquo .

 

No dividend was recommended for the half year.