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SINGAPORE: United Overseas Bank (UOB) saw its third-quarter earnings rise 5.3 per cent on-year to S$500 million.
The growth was attributed to higher interest and fee-based income. Analysts said the results were largely in line with expectations.
Improving market sentiment and better sales in the wealth management sector have boosted Singapore's banking sector in recent months.
Among the beneficiaries was UOB, which saw its net interest income for the three months ended September 30 grow 3.6 per cent on-year to S$925 million. The bank's net interest margin also picked up, by some 18 basis points.
However, some observers said its operating profit for the quarter proved disappointing.
Moh Tze Yang, investment analyst at SIAS Research, said: "Overall, bottomline-wise, it was within our expectations. That said, we were surprised... by its weaker operating profit. It fell 13.4 per cent quarter-on-quarter.
"This was on the back of weak non-interest income, which actually fell 28 per cent from the last quarter. With regard to the non-interest component, UOB will have to buck up their operations."
UOB also increased its provisions for bad debt by 49 per cent to S$235 million, and analysts said that given the size of the bank, this is a relatively small amount.
But they believe that the performance of non-performing loans is one indication that things are looking up.
Alfred Chan, Fitch Ratings' associate director (financial institutions), said: "For the gross non-performing loan ratio, I think OCBC has shown improvement. It declined from 2.1 per cent (in 2Q) to 1.8 per cent (in 3Q). For UOB, it has actually remained relatively stable, at 2.4 per cent.
"But if you were to compare these numbers to what we expect at the beginning of this year, when we expected a traumatic increase in non-performing loans of around 4 per cent by the end of this year, clearly they are not around this type of numbers. Things have performed much better than expected."
UOB shares rose 2.15 per cent to close at S$17.08 on Friday.
- CNA/ir
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