United Overseas Bank (UOB) has announced a 3% increase in its operating profit for the first half of 2025 (1H25), reaching S$4.0 billion, driven by significant growth in fee income. However, net profit saw a 3% decline to S$2.8 billion, attributed to pre-emptive general allowances set aside in response to macroeconomic uncertainties. The bank declared an interim dividend of 85 pence per ordinary share, with an additional 50 pence special dividend as part of its capital distribution package.
The bank’s net interest income remained stable year-on-year, with loan volume growth offsetting margin compression from lower benchmark rates. Non-interest income showed positive momentum, with net fee income rising 11% across wealth management, loan-related services, and credit cards. Despite a slight dip in trading activities, customer-related treasury flows contributed to a 1% increase in other non-interest income.
UOB’s cost-to-income ratio improved to 43.5% from 44.4% the previous year, thanks to tighter cost management. Asset quality remained stable, with a non-performing loan ratio of 1.6%. Credit costs for 1H25 were 34 basis points, reflecting higher specific allowances and pre-emptive provisions.
Group Wholesale Banking faced a 12% decline in profit before tax due to lower interest rates and competition. However, investment banking achieved record fees, and transaction banking remained a key contributor, supported by a 12% increase in trade loans. Group Retail Banking reported an 11% rise in profit before tax to S$1.1 billion, driven by growth in CASA, wealth, and cards.
Deputy Chairman and CEO Wee Ee Cheong highlighted the bank’s robust fee growth and resilient asset quality, stating, “Our regional franchise has gained significant scale following the Citigroup acquisition.” He expressed confidence in ASEAN’s long-term prospects, emphasising UOB’s commitment to supporting clients and investing in sustainable growth.
“`
