SINGAPORE: United Overseas Bank (UOB) on Friday (Feb 22) reported record net earnings of S$4.01 billion for the full year of 2018, the bank said on Friday (Feb 22).
Total income rose 6 per cent to S$9.12 billion, led by strong growth in net interest and income from fees and commissions, UOB said in a press statement.
UOB's fourth-quarter net earnings of S$916 million was 12 per cent lower than that of the third quarter amid "market uncertainties", though it was 7 per cent higher than the same period last year.
The bank reported that its funding position and capital base “stayed strong” despite market volatility.
Net interest income went up 13 per cent to S$6.22 billion, driven by broad-based loan growth and higher net interest margin.
Net interest margin is a measure of bank profitability - a wider number indicates a higher profit for the bank. This rose five basis points to 1.82 per cent in 2018.
UOB also reported a net fee and commission income increase of 5 per cent to S$1.97 billion, due to strong performance in loan-related, credit card, trade-related and fund management fees.
Non-interest income declined 20 per cent to S$930 million, largely due to unrealised market-to-market on investment securities and lower gains from sale of investment securities.
Higher performance-related staff costs and IT-related expenses led to a 7 per cent increase in total expenses, which was posted at S$4 billion.
The bank's non-performing loan ratio improved further to 1.5 per cent from 1.6 per cent in the last quarter, while non-performing assets coverage remained stable at 87 per cent.
UOB’s deputy chairman and chief executive officer Wee Ee Cheong said: “Healthy growth across our core franchise has enabled us to deliver record profits in 2018.
"With our strong balance sheet and robust capital positions, we are pleased to reward our shareholders with an increased total core dividend of S$1 per ordinary share and a special dividend of 20 cents for 2018.
“As global uncertainties persist in 2019, we will stay disciplined in pursuing sustainable growth, while maintaining a risk-focused approach and equipping our people for the future."
He added: “As a long-term player with deep knowledge of and an extensive presence that connects Southeast Asia, we are best positioned to ride on the region’s immense growth potential.
“For our customers across the region, we will continue to invest in our omni-channel capabilities and to forge ecosystem partnerships, such as our recent ones with Prudential and Grab, in providing innovative and relevant solutions.
“Starting in Thailand, we will also deepen engagement with ASEAN’s massive base of ‘mobile first’ and ‘mobile only’ customers through our Digital Bank.”
Singapore’s other lenders DBS and OCBC are also gearing up for tougher times, as the economy slows partly due to the ongoing US-China trade war.
Weak insurance business led to a 10 per cent drop in quarterly profit for OCBC, while DBS posted a record annual profit and an 8 per cent rise in quarterly profit.