The property market appears to be bottoming out, said United Overseas Bank (UOB) chief executive Wee Ee Cheong yesterday, but it is still too early to rejoice.
Mr Wee told a results briefing: "Sentiment has improved, sales have picked up, but a lot depends on the basic fundamentals of the economy, such as if the economy is doing well and employment is strong." He noted it is still too early to say how sustainable the market is, adding that he would still err on the side of caution.
UOB has a market share of "well over 20 per cent" of the local housing loan sector and its sales team is "trained to hunt" for even more customers, he noted.
The lender is also focused on its regional operation. "We have extended our network and presence in the new frontier markets of Vietnam and Myanmar, given their long-term growth potential."
UOB announced last week that it was the first Singapore lender to get a subsidiary bank licence in Vietnam. This allows it to grow its branch network beyond Ho Chi Minh City, and to offer products and financial solutions to businesses and consumers in the country.
Mr Wee said: "Vietnam has an 80 million to 90 million population base, which is young, and we do see many big MNCs (multinational companies), and even regional corporates, going there. That suits the profile of the customer base that we're looking for."
AT A GLANCE
Q2 TOTAL INCOME: $2.18 billion (+7.9%)
Q2 NET PROFIT: $845 million (+5.5%)
Q2 INTERIM DIVIDEND PER SHARE: 35 cents
He expects to see some results in the next three to five years, "as long as we get our act together - we've to put in our capital and recruit people who can help us to do the job of connecting the dots".
The briefing heard that second-quarter net profit rose 5.5 per cent to $845 million, compared with the same period last year.
The increase was mainly owing to growth in net interest income, and fee and commission income.
Total income expanded 7.9 per cent to $2.18 billion for the three months to June 30.
Net interest income grew 12 per cent to $1.36 billion, driven by gross loans that grew 7.3 per cent year on year to $228 billion as at June 30.
Net interest margins improved seven basis points to 1.75 per cent.
Non-interest income in the quarter inched up 1.8 per cent to $828 million while fee and commission income increased 9 per cent to $517 million on higher credit card, fund and wealth management fees.
Mr Wee added that the wealth management business had steady growth, with assets under management up 12 per cent year on year to $99 billion as at June 30.
The second-quarter non-performing loans ratio was 1.5 per cent.
Total allowances - a key gauge of how much a bank sets aside to cover potentially risky loans - increased 12 per cent to $180 million.
Quarterly earnings per share came to 50 cents, compared with 49 cents in the same period a year ago, while net asset value per share was $19.63 as at June 30, compared with $18.82 as at Dec 31.
UOB has declared an interim cash dividend of 35 cents per ordinary share, and the scrip dividend scheme will be applied.
UOB shares closed 55 cents down at $24.05 yesterday.