Robust growth across the board helped United Overseas Bank (UOB) rack up a record net profit in the third quarter.
Earnings for the three months to Sept 30 rose 18.7 per cent to $866 million over the same period last year, thanks in part to a surge in net interest income and non- interest income.
Net interest income rose 10.5 per cent to $1.16 billion as a result of higher average loan volume in Singapore and the region.
UOB's net interest margin came in at 1.71 per cent, unchanged from last year and the previous quarter.
The bank said its gross customer loans grew 11 per cent over the same period last year to $195.9 billion, although they are up by only 1.5 per cent compared with the previous quarter.
Despite tough competition, customer loans in Singapore rose 8.7 per cent to $126.6 billion, compared with the same period last year, but they rose by only 0.4 per cent over the previous quarter.
UOB, which did not hold a briefing yesterday, said through its managing director for investor relations Jimmy Koh that the marginal increase in growth on a quarter-on-quarter basis was not unexpected.
"This is a reflection of the moderation in global growth and global economies due to measures to contain consumer leverage and inflation of asset prices," Mr Koh said in response to queries.
Non-interest income, meanwhile, grew 32.1 per cent to $816 million due to higher contributions from the fund- and wealth-management businesses as well as investment banking.
Operating expenses rose 11.9 per cent to $800 million due to higher staff costs and revenue-related expenses where the bank expanded its franchise.
Non-performing loans (NPL) were contained, at least in this quarter, falling 0.9 per cent to $2.29 billion, compared with the previous three months.
NPL rose 11.2 per cent to $2.31 billion in the second quarter over the first due to a deterioration in the mortgage book.
Total impairment charges came in at $162 million, a 90.5 per cent hike from a year ago and an 8.4 per cent increase from the previous quarter.
This was due to a few specific non-performing loans in Thailand and Indonesia, particularly in the manufacturing area, UOB said.
Mr Koh said those were isolated cases where the loans were downgraded as a precautionary measure, adding that he is confident of asset quality across the region.
Earnings per share came in at $2.10 at the end of September, up from $1.74 in the same period a year ago, while net asset value per share was $16.51, up from last year's $14.92.
Chief executive Wee Ee Cheong said in a statement: "We achieved a good set of results, with our continued discipline in balance sheet management and investment in fee-generating capabilities.
"The recent award of a branch banking licence in Myanmar reinforces our commitment to the region and our investments in serving our customers' needs."
This article was first published on October 31, 2014.
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