SINGAPORE - United Overseas Bank's (UOB) first-quarter net profit rose 21 per cent to S$978 million from the previous year - as total income grew 9 per cent to reach S$2.23 billion, led by strong growth in both net interest income and net fee and commission income.
Earnings per share for the three months ended March 31, 2018, increased to 2.28 Singapore cents from 1.92 cents a year ago. No dividend has been declared for the period, the bank reported on Thursday (May 3).
Net interest income grew 13 per cent year on year to S$1.47 billion, lifted by a higher net interest margin and loan growth of 5 per cent.
UOB said that loan growth was broad-based across most territories and industries, on the back of an improved operating environment over the year before.
Net interest margin - defined as the difference between interest income generated and the amount of interest paid to lenders - increased 11 basis points to 1.84 per cent on higher loan margin and inter-bank yields.
Meanwhile, net fee and commission income went up by 18 per cent from S$439 million last year to S$517 million this year, led by higher contributions from the bank's wealth management and fund management services.
UOB's group retail segment reported income growth of 6 per cent to S$963 million, mainly from wealth management and fee-based products. The bank's group wholesale banking income grew 4 per cent to S$928 million on higher cash management, trade and investment banking activities, while its global markets segment posted double-digit income growth of 20 per cent to S$142 million, driven by favourable foreign exchange movements.
Total expenses increased 11 per cent over the same quarter last year, due to higher performance-related staff costs and IT-related expenses as the bank continued to invest in "talent, technology and infrastructure" to enhance its "connectivity, digitalisation, product capabilities and services".
UOB chief executive and deputy chairman Wee Ee Cheong said: "Against a backdrop of an improving operating environment and a pick-up in customers' activities, we achieved our strongest quarter ever, with double-digit percentage earnings growth."
He noted that UOB will continue to invest in its core franchise, riding on the growing digital connectivity in the region to enhance the customer experience for consumers and businesses.
"For example, we are the first regional bank to establish a joint venture to provide a next-generation digital credit assessment solution to make it smarter and faster for companies to extend credit to underserved customers across Asean."
Mr Wee added: "Despite ongoing trade tensions and financial market volatilities, we are confident of Asia's economic fundamentals and growth potential which continue to present immense opportunities given rising urbanisation, affluence and business flows. As a long-term player with an extensive footprint and connectivity in the region, UOB is well-placed to meet our customers' growth needs."
On Thursday, UOB's shares opened trading 1.467 per cent or 44 cents lower at S$29.55.