In the 1QFY2025, net interest income (NII) rose by 2% y-o-y but fell by 2% q-o-q to $2.41 billion due to the shorter quarter.
Net interest margin (NIM) stood at 2%, down 0.02 percentage points y-o-y, but unchanged q-o-q. Loans rose by 6% y-o-y and 1% q-o-q thanks to wholesale growth and mortgages.
The bank’s net fee income surged to a new high of $694 million, up 20% y-o-y and 22% q-o-q, due to record loan-related fees as well as healthy momentum in wealth and card fees.
Other non-interest income fell by 5% y-o-y but increased by 25% q-o-q to $554 million from stronger customer treasury income and good performance from trading and liquidity management activities. Trading and investment income stood at $466 million, down 12% y-o-y but up 27% q-o-q.
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During the quarter, the bank’s non-performing loan (NPL) ratio stood at 1.6%, 0.1 percentage points higher y-o-y and q-o-q.
Total credit costs stood at 35 basis points, up from 20 basis points in the 1QFY2024 and 25 basis points in the 4QFY2024. This quarter, UOB increased its total allowance for credit and other losses at $290 million, up 78% y-o-y and 28% q-o-q.
In the same period, cost-to-income ratio stood at 42.6%, improving from 44.6% in 1QFY2024 and 45.6% in 4QFY2024.
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The bank’s net stable funding ratio (NSFR) stood at 116%, down by 5 percentage points y-o-y and unchanged q-o-q. Its transitional common equity tier 1 (CET-1) ratio stood at 15.5%, 1.6 percentage points higher y-o-y and unchanged q-o-q. Fully-loaded CET-1 ratio stood at 15.4%. As at March 31, the bank's current account savings account (CASA)/deposit ratio stood at 55.1%, up from 50.6%
Noting the group’s “solid set” of results for the first quarter, UOB’s deputy chairman and CEO, Wee Ee Cheong, warned that the bank sees a slowdown in global growth in the near-term due to macroeconomic uncertainties triggered by the US tariffs.
Yet, the bank remains positive on Asean’s resilience and long-term potential.
“The region’s competitive edge in manufacturing and commodities will ensure its relevance as global supply chains reconfigure. We expect flows within Asean and between Asean and the rest of the world to continue growing as countries seek new ways to prosper,” says Wee.
“With our robust balance sheet, healthy capital and strong liquidity positions, we are well-equipped to address risks and seize the right opportunities for growth. We stand ready to support our customers and community through these extraordinary times,” he adds.
In UOB's CEO presentation, the bank announced that it would pause its 2025 guidance for now. At the briefing, Wee says the bank will resume its forecast when the situation stabilises. It also remains committed to its $3 billion capital distribution plan. During UOB's 4QFY2024 results, the bank guided for high single-digit loan growth, double-digit fee growth and higher total income in FY2025. The bank also guided for a cost-to-income ratio of around 42%, which it achieved this quarter, and credit costs of 25 basis points to 30 basis points.
This quarter was group CFO Leong Yung Chee’s first results briefing. Leong’s appointment was announced in December 2024. He succeeded Lee Wai Fai, who retired from his role as CFO after 20 years. “Having been in the bank for so long, I think I've been exposed and [been] involved in a lot of the strategic planning and financial discussions, so it's okay,” Leong tells The Edge Singapore.
Shares in UOB closed flat at $34.98 on May 6.
