UOB shares jump after CEO says bank will consider share buyback, sees better loan growth in 2025
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UOB saw new record highs in net fee income as well as trading and investment income in the third quarter.
PHOTO: LIANHE ZAOBAO
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SINGAPORE – UOB will consider a share buyback, among other options, chief executive Wee Ee Cheong said at an earnings briefing on Nov 8, sending the bank’s shares rallying.
The stock closed up $2.39, or 7.1 per cent, at $35.69 on Nov 8.
UOB is now trading at a record high, similar to rival DBS Group Holdings, whose stock surged a day earlier after it unveiled a new $3 billion share buyback programme
The bank is “actively” looking to take full advantage of capital management, hopefully by the end of the year, according to Mr Wee.
UOB has excess capital of about $2 billion to $2.5 billion, said chief financial officer Lee Wai Fai.
The lender earlier reported higher-than-expected earnings for the third quarter, driven by record fees underpinned by wealth management, brisk trading and investment. UOB also flagged a pickup in loans growth in 2025.
South-east Asia’s third-largest bank by assets said July-September net profit jumped 16 per cent to a record $1.61 billion from $1.38 billion a year earlier. This beat the mean estimate of almost $1.5 billion from four analysts polled by LSEG.
“Amid a volatile global economy, South-east Asia stands out as a bright spot,” said Mr Wee in a statement. “We are confident of Asean’s long-term potential, bolstered by strong economic fundamentals and a surge in foreign direct investment inflows with shifting supply chains,” he added.
Mr Wee projected high single-digit loan growth for 2025, versus low single-digit for 2024, according to slides accompanying the earnings results.
The bank expects double-digit fee growth, higher total income, cost-to-income ratio at 41 per cent to 42 per cent and credit costs within 25 to 30 basis points range, all broadly in line with 2024, the slides showed.
UOB’s results followed that of larger peer DBS, which on Nov 7 posted a record net profit of $3.03 billion in the third quarter on the back of record fee income driven by wealth management, higher treasury customer sales and increased markets trading income.
The better third quarter performance was driven by record high net fee and trading and investment income.
However, net interest margins, a key gauge of profitability, were slightly lower at 2.05 per cent in the third quarter from 2.09 per cent in the same period a year earlier. REUTERS, BLOOMBERG
