UOB's net profits up 8% to $4.32b in FY2019

A final dividend of $0.55 and a special dividend of $0.20 was as recommended.

United Overseas Bank’s (UOB) posted a full-year net profit of $4.32b for 2019, 8% YoY higher than the $4.01b in 2018, the company announced in an SGX filing.

Total income jumped 10% YoY to $10.03b, led by growth in client franchise as well as an improvement in trading and investment income. Return on equity also increased 11.6% in 2019 from 11.3% in 2018, the results showed.

For Q4 2019, net profits edged up 10% YoY to almost $1.02b from only $916m in Q4 2018. However, this was 10% YoY lower than the $1.12b achieved in Q3 2019.

Total income for the quarter also rose 10% YoY to $2.43b.

Also read: UOB profits up 8% to $1.12b in Q3

A final dividend of $0.55 and a special dividend of $0.2 per ordinary share was recommended by UOB’s board. Together with the interim dividend,, the total dividend for the year amounts to $1.3 cents per ordinary share. The dividends will be paid in cash on 21 May 2020.

UOB’s net interest margin (NIM) for 2019 came lower at 1.78 from 1.82 in 2019, attributed to lower interest rates and increased competition. Despite this, net interest income grew 6% YoY to $6.56b, as the average gross loans for the year was 9% higher.

Non-performing loans (NPL) ratio remained the same as the previous year at 1.5, whilst loan deposit ratio fell to 85.4 in 2019 from 88.2 in 2018.

Meanwhile, net fee and commission income inched up 3% YoY to $2.03b, led by double-digit growth in wealth management and credit cards, but by offset lower fund management fees.

Wealth management net fee and commission income grew 18% YoY to $641m, from $543m in the previous year. Credit card income also jumped 11% YoY to $488m in 2019 from $440m in the past year.

Also read: Wealth and retail drive 60% of Singapore banks' fee income

But whole-year fund management fees dropped 9% YoY to $236m in 2019 from hitting $261m in 2018.

Other non-interest income skyrocketed 54% YoY to $1.44b from only $930m in 2018, with trading and investment income soaring 72% YoY to $1.12b from improved customer flows and higher gains from investment securities.

UOB’s business segments all reported gains for the whole year. Group retail income grew 9% YoY to $4.3b on the back of higher net interest income from volume growth and an improved deposit margin.

Group wholesale banking income also grew 6% to $4.1b, benefitting from cash management, treasury and loan-related activities. Cross-border income accounted for 28% of the segment’s income.

Contribution from associated companies declined to $51m, which UOB said was mainly due to reduced shareholdings.