UOB Posts 8.6% Rise in Q4 Net Profit, Beats Expectations
UOB on Wednesday (Feb 19) posted a net profit of S$1.52 billion for the fourth quarter ended December, up 8.6 per cent from S$1.4 billion in the previous corresponding period.
Strong Performance
This included S$17 million in one-off expenses from the lender’s Citigroup integration costs after taxes, which was 81.9 per cent lower than the S$94 million recorded in the same period the previous year.
The earnings beat the S$1.48 billion consensus forecast in a Bloomberg survey of six analysts.
Dividend and Capital Distribution
The lender has declared a higher final dividend of S$0.92 per share for the half-year period, up from S$0.85 the year before. This brings the full-year dividend to S$1.80 per share, representing a payout ratio of about 50 per cent. The lender is also proposing a special dividend of S$0.50 per share, paying out S$800 million of UOB’s surplus capital, over two tranches in 2025.
Financial Performance
Net interest income for the quarter was up 2 per cent on the year to S$2.45 billion, driven by loan growth of 5 per cent. Net fee income was stable at S$567 million. Other non-interest income was up 1.1 per cent on the year to S$443 million. UOB’s non-performing loan ratio remained at 1.5 per cent as at Dec 31, 2024.
Returning Surplus Capital
As part of the bank’s capital distribution strategy, the board has announced a S$3 billion package to distribute surplus capital over the next three years. The package comprises special dividends and share buybacks.
Share Buyback Programme
This includes the introduction of a S$2 billion share buyback programme, where shares will be acquired from the open market and cancelled.
Capital Position
The lender noted that its capital position "will remain strong", following the capital distribution. The package is estimated to optimise UOB group’s Common Equity Tier 1 capital adequacy ratio by one percentage point, based on its capital position as at Dec 31, 2024.
Conclusion
UOB’s strong financial performance and capital distribution strategy position the lender for continued growth and stability.
Frequently Asked Questions
Q: What was UOB’s net profit for the fourth quarter ended December?
A: S$1.52 billion
Q: What is the increase in net profit compared to the previous corresponding period?
A: 8.6 per cent
Q: What is the special dividend proposed by UOB?
A: S$0.50 per share, paying out S$800 million of UOB’s surplus capital, over two tranches in 2025
Q: What is the share buyback programme announced by UOB?
A: A S$2 billion programme, where shares will be acquired from the open market and cancelled
