UOB's full-year profit down 3.5% to $3.1b

Blame the lower gains from the sale of investment securities.

UOB Group, one of Singapore's banking giants, reported a 3.5% lower net profit for 2016 to $3.1b, a slightly lower amount compared to $3.21b in 2015.

This is despite the stable income at $8.06b. This is, however, was badgered by the 1.6% decline in non-interest income to $3.07b. The group's trading investment income also fell, recording an 8.1% decline to $877m due to lower gains from the sale of investment securities. This is partially offset by higher trading income. On the opposite end, fee and commission income increased 2.5% to $1.93b, driven by higher credit card and fund management fees.

Meanwhile, total expenses rose 2.8% to $3.70b from a year ago, largely from higher revenue and IT-related expenses.

"The Group was disciplined in managing total headcount and it continues to invest in technology and infrastructure to sharpen its capabilities. The expense-to-income ratio for the year was 45.9%," the group said in a statement.

UOB also noted that its total credit costs on loans were maintained at 32 basis points for the year. Specific allowance on loans increased $577m to $969m, primarily from NPL in oil and gas and shipping industries.

"Total allowance decreased 11.6% to S$594 million, due to the lower specific allowance on other assets and a release in general allowance. The Group’s general allowance remained strong at $2.7b at the end of the year. The ratio of general allowance to gross loans stood at 1.2%," the bank said.

For their 4Q16 performance, here's what UOB has to say:

The Group reported net earnings of S$739 million in 4Q16, 6.2% lower than 4Q15.

Net interest income remained stable at S$1.28 billion as the strong loan growth was offset by a 10 basis point decrease in net interest margin to 1.69%.

Non-interest income decreased 6.3% to S$753 million in 4Q16, driven by lower trading and investment income. However, fee and commission income grew 10.6% to S$531 million, contributed by higher credit card and wealth management fees.

Total expenses for 4Q16 were S$957 million, largely flat compared with a year ago.

Specific allowance on loans increased S$313 million to S$428 million due to NPL in the oil and gas and shipping industries. Total allowance decreased 31.4% to S$131 million in 4Q16, due to lower specific allowance on other assets and a release in general allowance.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia