UOB has reported a slight dip in its net profit, which fell 3% to S$2.83 billion (US$2.2 billion) in the first half of 2025 compared to the same timeframe last year. This decline is largely attributed to pre-emptive general allowances implemented by the bank’s risk management strategy in response to ongoing macroeconomic uncertainties, as indicated in their latest financial release.
On a more positive note, the bank’s operating profit climbed by 3% to S$4 billion (US$3.11 billion), buoyed by robust double-digit growth in fee income across various business segments.
The interim dividend was set at 85 cents per ordinary share, reflecting a payout ratio of approximately 50%. Furthermore, shareholders are set to receive the second installment of a previously declared special dividend of 50 cents.
Net interest income remained stable at S$4.74 billion (US$3.69 billion) during the first half, indicating that a growth in loan volumes helped mitigate the effects of margin compression resulting from lower benchmark rates. Additionally, other non-interest income saw a modest increase of 1%, reaching nearly S$1.05 billion (US$817.55 million).
Net fee income surged by 11% to S$1.33 billion (US$1.04 billion), driven by growth in wealth management, loan-related services, and credit card activities. As a result of tighter cost management, the bank improved its cost-to-income ratio, dropping from 44.4% the previous year to 43.5%.
The non-performing loan ratio stood at 1.6% for the first half of 2025, while credit costs were reported at 34 basis points. UOB cited higher specific allowances and pre-emptive general provisions as key factors behind these figures.
In contrast, wholesale banking faced a setback, with profits before tax declining by 12% in the first half of the year, largely due to lower interest rates and fierce competition for quality assets. Despite these hurdles, transaction banking accounted for nearly half of total wholesale banking income, navigating uncertainties stemming from U.S. tariffs.
Interestingly, the investment banking sector posted record fees, while customer-related treasury income experienced double-digit growth. Meanwhile, group retail banking reported a profit before tax of S$1.1 billion for the first half, marking an 11% increase as growth in current and savings account balances, wealth management, and credit cards offset income pressures from reduced rates and market competition.
Retail deposits also crossed the significant milestone of S$200 billion for the first time. Wealth management income saw an impressive 15% growth, fueled by clients converting deposits into invested assets under management (AUM). High net-worth AUM continued to gain momentum, with net new money inflows reaching S$3 billion in the second quarter of 2025, while credit card income rose by 5%, complemented by double-digit growth in card billings.
How did UOB’s net profit perform compared to last year?
UOB’s net profit fell by 3% to S$2.83 billion (US$2.2 billion) in the first half of 2025, compared to the same period in 2024.
What were the main factors affecting UOB’s net interest income?
Net interest income was stable at S$4.74 billion (US$3.69 billion), supported by growth in loan volumes that offset margin compression from lower benchmark rates.
Which business segment showed notable growth despite challenges?
Wealth management experienced significant success, with income growing by 15% as clients shifted their deposits into invested assets under management (AUM).
