UOB Q1 2021 net profit rises by 18% year-on-year to a shade over S$1.0bn ($748.4m). On a quarter-on-quarter basis, the net profit is ahead by 46%.
Moreover, income rises by 11% on a quarterly basis to S$2.5bn, around pre-Covid levels. Notably, fee income reaches a new high, led by wealth management fees from investments and bancassurance. This is in addition to healthy loans and investment banking activities including major advisory trades, coupled with stronger treasury income.
UOB Q1 2021 earnings are supported by its resilient, well-secured portfolio and asset quality. Credit costs in 1Q21 ease to 29 basis points following proactive sizeable provisions made in 2020. The UOB balance sheet remains robust with ample liquidity and strong Common Equity Tier 1 (CET1) ratio at 14.3%.
UOB Q1 2021 highlights
On a prior year basis, fee income rises by 24%. This is led by wealth, loan-related and fund management fees. On the other hand, net interest income is down by 4% y-o-y.
But this is more than offset by the impact of rate cuts on margins across the region.
However, the UOB net interest margin takes a hit and falls by 14 basis points y-o-y to 1.37%. UOB’s total impairment charge is down by 29%. This is mainly due to allowance for impaired assets. A major highlight is a reduction in the UOB cost-income ratio from 45.1% a year ago to 43.8%.
Loans, deposits rise
Total loans rise by 5% y-o-y to S$293bn. Meantime, total deposits are ahead by 3% to S$332bn. Total assets are up by 3% y-o-y to S$441bn.
Wee Ee Cheong, Deputy Chairman and CEO, UOB says: “UOB has achieved a strong start to 2021. Revenue drivers accelerate in the first quarter and net profit rebounds strongly, up 46% to S$1bn. Our core businesses are growing well across our diversified franchise and we are seeing quality growth with record fee income.
“We expect this momentum to continue as economic and business activity picks up. Across our key markets, we are seeing robust credit demand from our large corporate and institutional clients. We support them through our established network and connectivity, deep sectoral insights and local expertise.
“Asia’s prospects remain bright. Even so, we stay vigilant and nimble. As a responsible financial steward, we help our customers grow their business and wealth and create value for our stakeholders in forging a sustainable future.”