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Wed, Nov 04, 2020-7: 53 am
UOB posted a 40 percent drop in net earnings for its third quarter due to preemptive accumulation of loan allocations, it said Wednesday.
Net income for the three months ended September 30, 2020 was S $ 668 million, compared to S $ 1.12 billion for the prior year period.
An additional reserve of S $ 339 million was set aside for non-impaired assets to strengthen the provision coverage, the bank said, raising total borrowing costs to 68 basis points this quarter.
Annualized earnings per share stood at S $ 1.55 for the quarter, down 40.8% from S $ 2.62 a year ago.
Compared to the prior-year period, net interest income fell 13 percent to S $ 1.47 billion, as the effects of margin compression offset the 2 percent loan growth, the bank said. The net interest margin decreased 24 basis points.
However, from the prior quarter, net interest income for the quarter increased 1 percent, driven by an improvement in the net interest margin of five basis points to 1.53 percent, as mattresses Liquidity levels eased in line with a stabilizing funding environment, the bank said. .
Non-interest income was 15% lower, year-over-year, at S $ 786 million, as business activities between corporate and retail clients declined.
The bank’s delinquency rate was 1.5 percent, unchanged from the same period last year.
UOB CEO Wee Ee Cheong said the economic trajectory remains uneven and unclear, despite the first signs of recovery in the world economy. “Given the evolving geopolitical and pandemic situation, we remain vigilant, especially in our key regional markets. However, the quality of our assets is manageable and we are adequately provisioned even with the expiration of moratorium programs in the region,” said.
Shares of UOB closed on Tuesday 19.45 Singapore dollars, up 42 cents or 2.21 percent.
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