United Overseas Bank’s (UOB) 1QFY2026 ended March 31 net profit of $1.437 billion was above the latest Bloomberg estimate of $1.39 billion but within an earlier estimate three weeks ago of $1.43 billion. Net profit was up 2% q-o-q but down 4% y-o-y.
Net interest income moderated 1% q-o-q and 4% y-o-y to $2.3 billion primarily due to a shorter quarter, while net interest margin narrowed 2 basis points (bps) q-o-q to 1.82% amid continued margin pressures. These effects were partially offset by disciplined funding cost management, active balance sheet optimisation and modest asset growth.
Net fee income increased 2% q-o-q but fell 8% y-o-y to $637 million, underpinned by higher capital market activities and sustained momentum in wealth, notwithstanding a normalisation of card fees following the prior quarter’s seasonal peak. Other non-interest income rose 45% q-o-q but declined 17% y-o-y to $462 million from the year-end seasonal low, supported by stronger customer treasury income and prudent liquidity management, with trading activities benefitting from market volatility.
Total expenses were broadly unchanged q-o-q at $1.5 billion, with the cost-to-income ratio improving from 46.4% in 4QFY2025 to 44.5% in 1QFY2026, reflecting ongoing cost discipline alongside continued investments in regulatory requirements and strategic initiatives to support long-term franchise growth.
Specific allowance was $231 million in 1QFY2026, with total allowances at $203 million from an $18 million write-back of general allowance, resulting in total credit costs on loans of 26 basis points.
New non-performing assets (NPAs) fell q-o-q and y-o-y to $341 million. The non-performing loan (NPL) ratio was unchanged at 1.5%. Performing loans coverage was maintained at 1.0% with NPA coverage at 100% or 272% after taking collateral into account.
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The group’s Common Equity Tier 1 (CET-1) ratio stood at 15.3% as at March 31. The average all-currency liquidity coverage ratio (LCR) was at 144% and net stable funding ratio (NSFR) stood at 115% as at the end of 1QFY2026.
