UOB Q2 profit up 43% to $1 billion; dividend raised to 60 cents per share

The bank declared an interim dividend of 60 cents per ordinary share, compared with 39 cents a year ago. ST PHOTO: KUA CHEE SIONG

SINGAPORE (THE BUSINESS TIMES) - UOB's net profit for its second quarter rose 43 per cent, as more economies reopened and as it posted lower credit allowance, it said on Wednesday (Aug 4).

Net profit for the three months ended June 30 this year stood at $1 billion, compared with $703 million from the year-ago period.

The earnings beat the $968 million consensus forecast in a Bloomberg survey of five analysts.

UOB's share price jumped 22 cents, or 0.85 per cent, to $26.07 as at 9.16am, after the results announcement.

Net interest income for the quarter increased 8 per cent to $1.58 billion, led by loan growth of 6 per cent and an 8-basis point increase in net interest margin to 1.56 per cent.

Net fee and commission income grew 34 per cent to $595 million, driven by growth in wealth management, loan-related and fund management fees.

Other non-interest income declined 32 per cent to $243 million, mainly from a drop in non-customer-related gains.

Total allowance for bad loans more than halved to $182 million as much of the pre-emptive general allowance was taken last year, said UOB.

Following the lifting of a dividend cap, UOB declared an interim dividend of 60 cents per ordinary share, compared with 39 cents a year ago. This translates to a dividend payout ratio of 50 per cent.

The Monetary Authority of Singapore last month lifted its dividend curbs on locally incorporated banks and finance companies based in Singapore.

It joins other central banks that have recently eased dividend restrictions imposed on banks last year, as the global economy rebounds amid gradual reopenings and rapid vaccine roll-outs.

UOB's dividend will be paid in cash on Aug 27, with the bank suspending its scrip dividend scheme.

For the half-year, UOB's net profit rose 29 per cent to $2.01 billion.

• With additional information from The Straits Times

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