The bank posted a record quarterly wholesale banking income of $848 million, and a record AUM in wealth management in the first half of 2021.
UOB posted second-quarter earnings of S$1 billion ($740 million), unchanged from the first quarter, which brought first-half earnings of S$2 billion, according to financial statements released on Wednesday.
Net profit was 29 percent higher in the first half of the year compared to 2020, driven by strong business momentum and lower credit allowance, and 48 percent higher than the second half of 2020, supported by the group’s strong customer franchise and lower credit allowance, UOB said.
Core Business Growth
The bank noted healthy contributions across its core businesses, with income growing 5 percent to S$4.9 billion, fee income growing 28 percent to S$1.2 billion, and loans growing 6 percent to S$299 billion.
Cross-border income, which contributed to 29 percent of wholesale banking income, grew by 5 percent, while a recovery in market sentiment saw assets under management growing by 7 percent to S$137 billion, UOB said.
Total expenses remained stable at S$2.15 billion and cost-to-income ratio for the year improved from 45.6 percent to 43.8 percent. The bank also reduced its allowances to S$383 million, from S$682 million a year ago, noting that asset quality remains within expectations, with strong reserve coverage from the proactive general allowance taken in last year. Total credit costs on loans eased to 24 basis points.
In a media briefing on Wednesday morning, UOB deputy chairman and CEO Wee Ee Cheong said the bank is positive about its outlook and expects profits to continue to rebound, backed by strong single-digit growth in loans and double-digit growth in non-interest income. It also expects growth in Asean markets to improve as vaccination rates increase, which will further boost its performance.
The past quarter, the bank launched products like digital wealth manger SimpleInvest, which Wee said has received an «overwhelmingly positive response.» It is also working on distributed ledger and asset tokenization initiatives like digital bond issuance on Marketnode, and collaborating on central bank digital currencies.
The bank also expressed an interest in potentially acquiring Citi’s retail assets in the Asia Pacific region, to strengthen its regional franchise.
With the lifting of MAS restrictions, UOB is resuming its dividend payout ratio of 50 percent, which translates to 60 cents per ordinary share.