Govt curbs hit UOB's S'pore home loans

UOB reported higher net profit for the first quarter of this year, up 8 per cent to $1.05 billion, from $978 million for the year-ago period yesterday. But most of the gains in its mortgage business came from regional markets, not Singapore, which sa
UOB reported higher net profit for the first quarter of this year, up 8 per cent to $1.05 billion, from $978 million for the year-ago period yesterday. But most of the gains in its mortgage business came from regional markets, not Singapore, which saw flat growth.ST PHOTO: LIM YAOHUI

United Overseas Bank (UOB) is the second Singapore lender to feel the sting of last year's property cooling measures.

While UOB posted a rise in its overall mortgage book, the bank said it came from its regional markets.

UOB reported higher net profit for its first quarter of this year, up 8 per cent to $1.05 billion, from $978 million for the year-ago period yesterday.

Total income was up 8 per cent to $2.41 billion, from $2.23 billion previously, led by a recovery in trading and investment income, and healthy loan growth as macro conditions stabilised and financial markets rebounded.

"Housing loan growth was mainly from our regional markets, which saw quarter-on-quarter and year-on-year mortgage loans growth," said a UOB spokesman in response to queries.

"Singapore mortgage loan growth was flat quarter on quarter, and expected to be low single-digit for this year as the impact of cooling measures is still being felt," she said.

The bank's housing loans rose to $68.7 billion at end-March, up from $68.4 billion at the end of last year. It was $66.5 billion a year ago.

In contrast, DBS Group Holdings saw its mortgage book shrink for the first time in years in the first quarter of this year, according to results it posted last month.

DBS' total housing loans fell to $74.4 billion as at March 31, down from $75 billion as at end-2018.

  • AT A GLANCE

  • TOTAL INCOME: 

    $2.41 billion (+8%)

    NET PROFIT: 

    $1.05 billion (+8%)

It was $73.5 billion on March 31 last year. The Singapore home loans contraction of "half a billion dollars" was due to last year's round of government property curbs, DBS chief executive Piyush Gupta said.

UOB said the region will help it achieve mid-single-digit loan growth for the year.

"We are expecting mid-single-digit loan growth this year, mainly from regional connectivity growth opportunities," the spokesman said.

As at end-March, gross loans grew 12 per cent year on year and 3 per cent quarter on quarter to $270 billion, led by a broad-based increase across all territories and industries, UOB said.

Singapore loans rose 8 per cent year on year to $139 billion in the quarter, while regional countries contributed a strong growth of 14 per cent in the same period.

UOB's global network of over 500 branches and offices is mainly in Asean. It has subsidiaries in China, Indonesia, Malaysia, Thailand and Vietnam, as well as branches and offices across the region.

A version of this article appeared in the print edition of The Straits Times on May 04, 2019, with the headline 'Govt curbs hit UOB's S'pore home loans'. Print Edition | Subscribe