United Overseas Bank (SGX:U11) reported a 10% year-over-year increase in second-quarter net profit, boosted by record wealth management fees that offset softer loan-related fees from capital market activities.
Net profit climbed to SG$1.48 billion from SG$1.34 billion a year earlier, the Singaporean lender said in bourse filings on Friday.
Net interest income fell 2% year over year to SG$2.3 billion as net interest margin narrowed 8 basis points from the previous quarter to 1.74% due to lower asset yields.
Net fee income rose 5% to SG$665 million as wealth management fees rose to a record high, with clients converting more deposits into invested assets. In the first half, high-net-worth assets under management expanded 7% to SG$204 billion.
Attributable net profit in the first half rose 3% year over year to SG$2.92 billion, with earnings per share growing to SG$3.45 from SG$3.32.
Net interest income in the first half edged down 3% to SG$4.62 billion, while net fee income slipped 2% to SG$1.3 billion.
Credit costs stayed within guidance at 28 basis points for the second quarter, with total allowances of SG$211 million, up 4%, reflecting the downgrade of a closely monitored real estate account in Greater China, UOB said.
The lender's non-performing loan ratio stood at 1.6% at the end of June, up from 1.5% from the previous quarter.
The board declared an interim dividend of SG$0.88 per share for the first half, up from SG$0.85 a year earlier. The dividend is payable on Aug. 28.
"Our results reflect the resilience of our diversified franchise, and the momentum building across our key ASEAN markets. Wealth management reached new highs, while transaction banking benefited from healthy customer activity across the region," said UOB Deputy Chairman and CEO Wee Ee Cheong.
