SINGAPORE: United Overseas Bank (UOB) on Friday (Oct 28) said its net profit for the third quarter hit a record high of S$1.4 billion, up 34 per cent on a year-on-year basis.
The “strong” performance for the quarter ended September was driven by higher net interest income and customer-related treasury income, said deputy chairman and chief executive officer Wee Ee Cheong.
Following the announcement, shares of the local bank jumped 1.2 per cent to S$27.22 as of 1.15pm.
UOB’s net interest income for the third quarter rose 39 per cent year-on-year to a new high of S$2.23 billion, as net interest margin expanded 40 basis points on the back of rising interest rates and loan growth of 6 per cent.
This increase in net interest income more than offset the 10 per cent decline in net fee and commission income.
The latter fell to S$519 million, as loan-related fees moderated and wealth management fees remained soft amid subdued market sentiment, the bank said.
Meanwhile, other non-interest income surged 58 per cent on-year to S$431 million on the back of record-high customer-related treasury income, as demand for hedging activities rose.
Improved performance from trading and liquidity management activities amid market volatilities also helped.
UOB said its credit costs improved by 5 basis points from the last quarter to 17 basis points, as asset quality stabilised with the ratio for non-performing loans down slightly on-quarter to 1.5 per cent.
UOB Group’s balance sheet remained “robust with healthy liquidity”. All-currency liquidity coverage ratio improved to 142 per cent in the third quarter, while the loan-to-deposit ratio was “healthy” at 85.2 per cent, it said.