UOB profit up 8% to $1.05b in Q1

The earning boost came from strong income figures which hit $2.41b.

UOB opened the year on strong financial footing as profits rose 8% YoY and 15% QoQ to $1.05b in Q1, according to its financial statement.

The bank’s strong quarterly earnings were driven by robust income figures which rose 9% to $2.41b supported by a recovery in trading and investment income and healthy loan growth. Net interest income rose 8% to $1.59b in Q1 thanks to healthy expansion of the bank’s loan books at 12%. 

Also read: Banks turn to loans to boost earnings as wealth income weakens

However, net interest margin (NIM), a common measure of profitability, narrowed by 5 bp to 1.79%. Net fee and commission income also fell 7% to $479m due to lower wealth management and fund management fees, which was partially offset by higher loan-related and credit cards fees, which grew 9% and 7%, respectively. Other non-interest income rose 40% to $340m on improved customer-related income and higher trading income.

Also read: Banks grapple with tepid margins

Total expenses also rose 9% to $1.07b on the back of staff costs and IT-related expenses.

Across business segments, retail income rose 4% to $1b; wholesale banking income rose 14% to $1.02b and global markets income grew 1% to $144m.

UOB maintained a strong balance sheet in Q1 with the non-performing loan ratio (NPL) holding steady at 1.5% and non-performing assets at 89%. Total allowances for non-impaired assets hit $2b as of end-March. The bank’s Common Equity Tier 1 CAR also remained strong at 13.9%.

Rival lender DBS earlier announced profit results with Q1 earnings rising 9% to $1.65b.