SINGAPORE: United Overseas Bank (UOB) reported record net earnings of S$3.39 billion for the full year of 2017, the bank said on Wednesday (Feb 14).
Total income rose 10 per cent to S$8.85 billion, up 9 per cent from 2016 – a growth that led by new highs in both net interest income and fee and commission income.
For the fourth quarter of 2017, UOB registered net earnings of S$855 million, 16 per cent higher than the fourth quarter of 2016 largely due to increase in net interest income, fee and commission income and net trading income, the bank said in a press release.
It added that compared with the third quarter of 2017, net earnings were down 3 per cent mainly due to higher operating expenses.
Net interest income rose by 15 per cent to S$1.46 billion, contributed by higher net interest margin and loan growth.
Net interest margin is a measure of bank profitability, and the wider it is, the more profit a bank makes. UOB’s net interest margin improved by 12 basis point to 1.81 per cent.
The bank’s non-performing loans ratio stood at 1.8 per cent as at 31 December 2017. Due to a one-off accelerated recognition of non-performing assets (NPA) on oil and gas and shipping exposures, the banks NPA increased 26 per cent on year, and 12 per cent from the previous quarter to S$4.39 billion.
Mr Wee Ee Cheong, UOB’s deputy chairman and CEO, said: “We are pleased to have ended 2017 with record profits, as our core businesses drove both net interest income and fees to new highs.
“Despite headwinds in the last couple of years, particularly in the oil and gas sector, our balance sheet remains strong, with robust capitalisation and reserves buffer as well as ample liquidity.”
He added: “Coupled with our steady earnings growth momentum, we are able to reward our shareholders with an increase in core dividend to 80 cents per ordinary share, and a special dividend of 20 cents for 2017.
“With the improving outlook across the region, our customers are stepping up on their regional expansion plans and expect further growth in their personal wealth.”
Singapore's two other lenders, DBS and OCBC, also reported strong earnings growth for 2017.
On Feb 8, DBS announced it had registered a record net profit of S$4.39 billion in 2017. While on Wednesday, OCBC said its net profit surpassed the S$4 billion mark for the first time in 2017, with a 19 per cent rise to S$4.15 billion.
Additional reporting by Dewi Fabbri.