BROKERAGE firm UOB Kay Hian on Wednesday (Feb 28) reported a 92.2 per cent growth to its earnings for the second half ended Dec 31, 2023 on a lift to its commission and trading income, and interest income.
For H2 2023, the group’s net profit grew to S$96.3 million, up from S$50.1 million in the year-ago period.
The brokerage’s commission and trading income for the period hit S$152.9 million, up 9.6 per cent from S$139.6 million in the year-ago period, while interest income grew 28.7 per cent from S$101.2 million to S$130.2 million. The growth in interest income came about due to the higher interest rate environment, it noted.
Overall, the company’s revenue grew 16.6 per cent to S$303.7 million, up from S$260.5 million a year ago.
These results translate to earnings per share of 10.9 Singapore cents, versus 5.93 cents in H2 FY2022.
The board thus proposed a first and final dividend of 9.2 cents per ordinary share for FY2023, to be paid on Jun 26 if shareholders approve of it at the group’s upcoming annual general meeting to be held on Apr 25.
The FY2023 dividend is higher than the dividend of 6 cents per ordinary share declared in FY2022.
For the full year, revenue increased by 19.3 per cent to S$591.5 million. Its net profit rose by 62.6 per cent to S$165.6 million, up from FY2022’s S$101.9 million.
This came despite a 3.6 per cent drop in commission and trading income in the year to S$292.7 million, from S$303.7 million.
This is because interest income grew by a wider margin – 67.2 per cent – to S$262.3 million, from S$156.8 million in FY2022. This is also a result of higher interest rates, the company said.
Commission expenses, meanwhile, dipped 11.4 per cent to S$71.8 million, while staff costs increased 19 per cent to S$175 million. The group said this is because a higher proportion of commission income was generated by structured products.
That said, finance expenses grew 33.2 per cent in the year to S$52.5 million.
Assessing its performance for FY2023, the group said its core markets in East Asia recorded a drop in volumes, as demand slowed amid global tightening of monetary policy to fight inflation.
However, it was able to mitigate the impact with increased trading in the US markets, it said.
Giving its outlook for FY2024, the group said it foresees interest rates to come down. This “would likely improve liquidity and encourage more activity in the capital markets”, it pointed out.
Shares of UOB Kay Hian closed up 0.8 per cent at S$1.33 on Wednesday, before the results’ release.
