Strong Wealth Management Flows Drive Q2 Growth at UOB
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The bank’s strong second quarter was driven by strong wealth management flows, higher credit card volume and higher trading income. UOB’s net earnings grew in the second quarter to S$1.17 billion ($850 million) – 11 percent higher year-on-year and 8 percent higher than the previous quarter, due to improvements in both interest and non-interest income, the bank reported in a filing to Singapore Exchange before the market opened on Friday.
UOB’s net interest income grew 7 percent to S$1.65 billion, while net fee and commission income increased 6 percent to S$527 million, with strong wealth management flows and higher volume in credit cards and loan-related fees.
Non-interest income rose 33 percent to S$403 million, driven by higher trading income and gains from investment securities.
UOB’s net earnings for the first half of 2019 grew 8 percent year-on-year to reach a record S$2.22 billion ($1.61 billion), while total income rose 9 percent to reach S$4.99 billion on the back of strong loan growth and higher trading and investment income. Net interest income grew 8 percent to S$3.24 billion, net fee and commission income stayed flat, and non-interest income rose 36 percent to S$743 million, with stronger gains in trading income and investments.
The bank reported «healthy income growth» across all business segments compared to 2018 – Group Retail saw 7 percent income growth to S$2.07 billion, led by income growth from high affluent customers, while Group Wholesale Banking saw a 9 percent income growth to S$2.06 billion, led by volume growth and stronger contribution from the investment banking and treasury businesses.
UOB cited higher staff, revenue-related and IT-related expenses as behind a 10-percent growth in total expenses, reaching S$2.2 billion. Its cost-to-income ratio saw a marginal increase to 44.1 percent.
Our results reflect the relevance of our strategies in connecting our customers to opportunities across the region, deepening their engagement through our omnichannel approach and offering them the right solutions through our ecosystem partnerships, Wee Ee Cheong, UOB deputy chairman and chief executive officer, said in a statement.
UOB declared an interim dividend of 55 cents per ordinary share, up from 50 cents the year before.
Questions & Answers
Q.What were the main factors driving UOB's strong performance in the second quarter?
What were the main factors driving UOB's strong performance in the second quarter?
The bank's strong second quarter was primarily driven by robust wealth management flows, increased credit card volume, and higher trading income. Improvements in both interest and non-interest income also contributed to the growth.
Q.How did UOB's net earnings for the first half of the year compare to the previous year?
How did UOB's net earnings for the first half of the year compare to the previous year?
UOB's net earnings for the first half of 2019 reached a record S$2.22 billion, representing an 8 percent increase year-on-year. Total income for the period also rose by 9 percent.
Q.What caused the 10 percent growth in UOB's total expenses?
What caused the 10 percent growth in UOB's total expenses?
The 10 percent increase in total expenses, reaching S$2.2 billion, was attributed to higher staff, revenue-related, and IT-related expenses. This led to a marginal increase in the cost-to-income ratio.
Q.Which business segments saw healthy income growth compared to 2018?
Which business segments saw healthy income growth compared to 2018?
The bank reported healthy income growth across all business segments. Group Retail saw 7 percent income growth, largely from high affluent customers, while Group Wholesale Banking grew 9 percent, driven by volume and stronger contributions.
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