United Overseas Bank (UOB) of Singapore announced a weaker-than-expected 1% decline in third-quarter net profit from a year earlier on Thursday, October 26, but the bank still anticipated a brighter year ahead, with improved growth in loans and fees.
In contrast to low-to-mid single-digit loan growth and high single-digit fee growth for this year’s prognosis, UOB, Singapore’s third-largest bank by assets, predicted mid-single-digit loan growth and double-digit fee growth for its 2024 outlook.
The third-biggest bank in Southeast Asia predicted that margins would be the same in 2024, but that loan costs would be closer to 25 to 30 basis points in 2024 than they would be for the remainder of 2023.
The CEO and deputy chairman of UOB, Wee Ee Cheong, stated that “the macroeconomic environment could remain bumpy.” But we think the ASEAN area will continue to be strong. Strong consumer confidence and increasing investment into the area will support growth.
UOB said its net profit for the July–September quarter fell to S$1.38 billion (US$1 billion) from S$1.40 billion in the same period last year, primarily due to increased allowances for credit and other losses as well as costs associated with Citigroup’s integration.
The earnings fell short of the average forecast of S$1.46 billion made by four analysts surveyed by LSEG.
For almost S$5 billion last year, UOB completed its largest transaction in the past 20 years when it purchased Citigroup’s consumer business in four Southeast Asian nations. After all is said and done, the company’s retail clientele in these markets will have doubled.
