SINGAPORE (Aug 13): Brokerage house UOB Kay Hian posted 2Q19 earnings of $15.6 million, a 22.4% fall from $20.1 million for the same quarter last year.
This was due primarily to lower q-o-q trading volumes across UOB Kay Hian’s main regional markets, as concerns over US and China trade war significantly dampened investment sentiment.
Total income fell 4.5% to $94.9 million from $99.3 million the previous year, led by a 17.3% decline in commission income to $49.7 million.
Segmentally, interest income rose 6.7% to $33.5 million from $31.4 million the previous year due to higher interest rates. Other operating income also rose 63.8% to $9.5 million from $5.8 million last year, on the back of higher structured financing fees.
Although total costs and expenses grew 2.3% to $77.7 million, commission and personnel expenses fell 15.9% and 1.8% respectively, in line with lower business volume. Finance expenses increased 29.1%, due higher interest rates mainly for HKD and USD.
Consequently, profit after tax fell 23.8% to $15.5 million.
As at end June, cash and bank balances stood at $365,000, while earnings per share fell to 1.94 cents from 2.54 cents the previous year.
In its outlook statement, UOB Kay Hian noted that its earlier optimism for some improvement in the Sino-US trade tensions did not pan out during the second quarter, and this has been further exacerbated by deteriorating political unrest in Hong Kong. However, the recent softening of the Federal Reserve Board towards interest rates leading to the 25 basis point reduction in early August in US interest rates have reduced borrowing expenses.
Shares in UOB Kay Hian closed flat at $1.20 on Tuesday, prior to the announcement of results.
