UOB declares dividend of 88 cents; Q2 profit rises 1%

CEO Wee says succession planning in place when asked about retirement at briefing

- Prisca Ang

UOB's earnings rose slightly year on year in the second quarter as its fee income picked up pace, although this was dampened by a lower margin from interest rates.

The net profit of Singapore's third-largest bank rose to $1.43 billion in the second quarter, up from $1.42 billion a year ago, it said on Aug 1.

UOB's core net profit, which excluded costs from the integration of Citigroup's regional consumer units it had acquired, fell 1 per cent from $1.51 billion to $1.49 billion.

That is higher than the $1.47 billion average estimate of three analysts surveyed by Bloomberg.

The board declared an interim dividend of 88 cents per share, representing a payout ratio of 51 per cent.

UOB's chief executive officer Wee Ee Cheong said Asia will benefit as interest rates gradually ease, spurring growth and leading to a further pickup in commercial activities.

"Closer to home, Asean continues to be resilient, supported by robust economic fundamentals and supply chain diversification, which has resulted in a steady inflow of foreign direct investments into the region," he told a media briefing on Aug 1.

UOB's second-quarter net interest income dropped 1 per cent to $2.4 billion, following a seven basis point moderation in net interest margin. Loans grew by 2 per cent, or $5 billion, from the second quarter and 3 per cent from a year ago.

This was driven by wholesale trade and retail mortgage loans.