UOB's Q1 net profit rises 9.2% to $788 million

United Overseas Bank (UOB) followed its peers in reporting stronger-than-expected earnings. -- BT FILE PHOTO: ARTHUR LEE CH
United Overseas Bank (UOB) followed its peers in reporting stronger-than-expected earnings. -- BT FILE PHOTO: ARTHUR LEE CH

SINGAPORE - United Overseas Bank (UOB) followed its peers in reporting stronger-than-expected earnings.

It said in a statement after markets closed on Wednesday that its net profit rose 9.2 per cent to $788 million for the first quarter ended March 31.

This was better than a Reuters poll of six analysts, whose mean estimates amounted to $740 million.

UOB said net interest income shot up by 15.2 per cent to $1.11 billion, as loans grew 12.7 per cent to $189 billion.

Net interest margin also improved by 3 basis points to 1.73 per cent.

The bank added that its asset quality continued to be strong with the non-performing loan ratio 1.1 per cent, down from 1.3 per cent in the year ago period.

But non-interest income fell. Fee and commission income dropped 8.6 per cent to $414 million, while other non-interest income declined 10.6 per cent to $228 million.

Operating expenses also put a drag on its earnings, rising 8.6 per cent to $755 million. This was driven by staff and business-related expenses.

The bank's expense-to-income ratio increased to 43.1 per cent to 41.6 per cent in the same period last year.

Total impairment charges jumped 20.5 per cent to $157 million, in line with loan growth, while individual impairment charges fell 16.7 per cent to $32.8 million.

Earnings per share rose to $1.94 from $1.73 in the quarter.

Net asset value per share went up to $15.90 at the end of March from $15.36 at the end of December.

UOB shares closed up 58 cents at $21.76 on Thursday.

Both DBS and OCBC Bank reported record first-quarter profit before markets opened on Thursday.