UOB has reported a record core net profit of S$6.1bn ($4.54bn), up 26% y-o-y for the financial year to end December. Earnings are boosted by strong income growth and an enlarged customer franchise.
Net interest income rises by 16% to S$9.7bn, on the back of strong margin expansion of 23 basis points and a loan growth of 2% in constant currency. Net fee income is up by 4% to S$2.2bn. This reflects higher credit card and wealth fees, although this is moderated by softer loan-related fees. Asset quality remains stable with a non-performing loan (NPL) ratio at 1.5%.
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Group wholesale banking income rises by 14% to S$7.1bn, led by strong growth in the transaction banking business. This now accounts for more than half of the group wholesale banking income. Cross-border income also performs strongly, rising 9% from 2022 levels.
Group retail income increases 36% to S$5.5bn, led by a strong increase in net interest income. Credit card fees rise by 66% to a new high of S$382m. This is underscored by higher customer spending and an expanded regional franchise. Amid cautious investor sentiment, wealth management income increases by 13%. This is supported by UOB’s growing bancassurance market share and a pick-up in demand for fixed income products.
UOB retail banking customers exceed 8 million
Despite market volatility, strong net new money inflows of S$22bn grew assets under management from affluent customers to S$176bn. As of the end of 2023, total retail customers exceed 8 million, with about 1 million organic new-to-bank customers. More than half of these new-to-bank customers were acquired digitally.
The group continued to make good progress on its sustainability agenda in 2023. In October, it set up a Sustainability Advisory Panel. Three independent industry experts are advising the board and management on UOB’s sustainability strategy, targets and initiatives. The group’s sustainable financing portfolio reached S$44.5bn in FY23. The group will continue to work closely with its customers to support them on their transition to a low-carbon economy.
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By GlobalDataOne-off bonus payment for junior employees
UOB will provide its junior employees, Class II officers and below, an extra month of bonus on a one-off basis. This additional bonus will be paid to about 6,000 employees across the Group, of whom about 600 are in Singapore.
Wee Ee Cheong, UOB Deputy Chairman and CEO, said: “The group delivered a record core net profit for the year. This is fuelled by strong income growth through a diversified business franchise even as we strengthen our balance sheet. We remain prudent in maintaining ample liquidity and funding while we continue to invest to seek quality and resilient growth.
“Global economic outlook remains uncertain in the near term, but Southeast Asia continues to be a bright spot. We are optimistic about ASEAN’s potential. Our strong franchise across ASEAN positions us well to capture opportunities in the region.”
