UOB Group, having set aside more general allowance as a pre-emptive move, has reported earnings of $2.8 billion for 1HFY2025, down 3% over the year-earlier period ended June 2024.
For its 2QFY2025, overall earnings dropped by 10% q-o-q to $1.3 billion, and 6% y-o-y, with lower interest rates.
Fee income in 2QFY2025 dropped as well as wealth management customers, following a record 1QFY2025, became more cautious amid ongoing macroeconomic uncertainties.
As expected, UOB has also lowered its interim dividend, following what OCBC did earlier.
For its 1HFY2024, UOB paid 88 cents per share. For the latest 1HFY2025, it plans to pay 85 cents per share, which is at a payout ratio of 50%. Shareholders will also receive the second tranche of the special 50 cents dividend as part of its capital distribution package.
The bank has turned more cautious. Net interest margin for 1HFY2025 has dipped to 1.96% from 2.04% in 1HFY2024 on asset repricing. It is guiding for a full year FY2025 NIM of 1.85% to 1.90%.
See also: PhillipCapital to takeover 1,500 clients from Sony's local life insurance unit
It now expects loan growth to be in the "low single-digit", down from "high single-digit" seen when it reported its FY2024 in February.
UOB is also seeing fee growth to be in the "high single-digit", a moderation from "double-digit".
Net credit costs will remain at between 25 to 30 basis points, and it will top up its general provisions buffer.
See also: Great Eastern at 5-year high on trading resumption on Aug 21
Wee Ee Cheong, the bank's deputy chairman and CEO says the bank has delivered a steady set of results.
"As the global landscape transitions towards a multipolar world order, Asean continues to demonstrate resilient growth. We remain confident in the region’s long-term prospects, anchored by sound fundamentals. With regional integration, trade diversification and rising foreign direct investments, ASEAN is well-positioned to thrive in the evolving global economy.
Following the acquisition of Citigroup's consumer business in Asean, UOB says its regional franchise has gained significant scale, expanding to more than 8.4 million.
"We are progressing well in reshaping our business model towards a more diversified and fee-driven revenue mix – leveraging our connectivity strength and regional scale.
"As a long-term player, we are committed to supporting clients through uncertainties and investing in capabilities for sustainable growth," he says.
UOB shares closed at $36.45 on Aug 6, up 0.22% for the day but down 0.27% year to date.
