SINGAPORE - United Overseas Bank posted a net profit of $1.12 billion for the third quarter, rising 8 per cent from $1.04 billion for the year-ago period, on the back of stronger client franchise income and trading and investment income.

The bank's net interest income rose 5 per cent to $1.69 billion for the quarter ended Sept 30, driven by healthy loan growth of 8 per cent. Net interest margin fell by four basis points to 1.72 per cent amid declining interest rates and a competitive pricing environment, said UOB in a media statement.

Loans-to-deposits ratio was higher at 89.3 per cent compared with 85.7 per cent a year ago.

For the third quarter, UOB's net fee and commission income rose 14 per cent to $551 million, thanks to higher fees from wealth management flows and loan-related and credit cards fees. Trading and investment income grew 67 per cent to $310 million from improved customer flows and gains from investment securities, said the bank.

Total expenses in Q3 were up 14 per cent to $1.15 billion, with cost-to-income ratio at 44.2 per cent, in line with income growth and investment in strategic initiatives.

Total allowances jumped 53 per cent to $145 million, due to higher allowances for impaired assets, said UOB.