UOB Group has reported net profit after tax (NPAT) or net earnings of $1.05 billion, representing a 57% growth y-o-y and a 4% q-o-q increase for the 3QFY2021 ended September.
The higher earnings were due to sustained income momentum and stabilising credit outlook, said the bank in their 3QFY2021 business update on Nov 3.
The group’s performance for the quarter was also due to its growth engines of connectivity, digital and sustainability capabilities.
3QFY2021 net interest income improved 9% y-o-y and 2% q-o-q to $1.60 billion, while net fee income grew by 15% y-o-y and dipped 1% q-o-q at $589 million.
The growth in net interest income (NII) was led by healthy loan growth coupled with a 2-basis point increase in net interest margin (NIM) to 15.5%.
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The higher net fee income y-o-y was attributable to strong growth seen across all activities, particularly in loan-related, wealth and fund management as well as credit card fees.
Accordingly, total income for the 3QFY2021 grew 8% y-o-y and 1% q-o-q to $2.42 billion.
Operating profit for the 3QFY2021 stood 10% y-o-y and 2% q-o-q higher at $1.38 billion.
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Other non-interest income during the quarter fell 5% to $259 million mainly from lower investment gains.
Total operating expenses for the 3QFY2021 stood largely unchanged at $1.07 billion.
The bank’s non-performing ratio (NPL) during the quarter remained stable y-o-y and q-o-q at 1.5%
In the 9MFY2021, NPAT surged 37% y-o-y to $3.06 billion, which was attributable to the robust loan growth, record fees and lower credit costs.
9MFY2021 net interest income increased 4% y-o-y to $4.71 billion, while net fee income improved by 24% y-o-y to $1.82 billion.
During the nine-month period, the bank saw record fees, which are particularly attributable to wealth and loans as investment and trade activities pick up.
Total income for the 9MFY2021 stood 6% up y-o-y at $7.36 billion.
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As at end-September, credit costs stood at 20 basis points, which remained stable q-o-q and represented a 48 basis point decline y-o-y.
Customer loans for the 3QFY2021 stood at $306 billion, up 9% y-o-y and 3% q-o-q, which was supported by large corporate loans.
The group’s funding position, as at Sept 30, remained healthy with a slightly lower loan-to-deposit ratio (LDR) of 85.1% from 86.7% in the 3QFY2020.
However, its current account savings accounts (CASA) rose to a new high of 55.8%, representing growths of 4.8% y-o-y and 3.1% q-o-q during the 3QFY2021.
As at end-September, UOB’s common equity tier 1 (CET1) ratio eased to 13.5%, down 0.5 percentage points y-o-y, mainly due to strong asset growth and the interim dividend paid.
The group’s leverage ratio of 7.1%, down 0.3 percentage points y-o-y, still remained above the minimum regulatory requirement of 3%.
On the results, UOB’s deputy chairman and CEO, Wee Ee Cheong say he remains “positive of strong activities along the Greater China-Asean trade corridors” on the back of the gradual reopening of borders.
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He adds that the bank’s strong fundamentals will “enable us to continue investing to deepen our capabilities in connectivity, digital innovation and sustainability – areas that are set to drive Asia’s growth for the decades to come.”
“We are pioneering progressive solutions in areas such as decentralised finance and digital assets, as well as through our unified digital platform, UOB TMRW. These initiatives enable us to provide our customers with digital solutions for greater efficiency and an enhanced experience,” he continues.
“We also lead the region in creating solutions to help individuals and businesses adopt sustainability as their way of life… We believe this is our role as a responsible financial steward, as well as a catalyst and enabler in forging a sustainable future.”
Shares in UOB closed 52 cents higher or 1.94% up at $27.39 on Nov 2.
