[SINGAPORE] Shares of UOB fell by more than 2 per cent on Thursday (Aug 7) in early trade, on the back of the local bank’s second-quarter results. It saw a 6 per cent year-on-year decline in its net profit of S$1.34 billion for the three months ended June 2025, from S$1.43 billion in the same year-ago period.
This figure missed the S$1.48 billion consensus estimate in a Bloomberg poll of six analysts. The fall in net profit also came as net interest income for Q2 fell 3 per cent to S$2.34 billion, as net interest margin declined 14 basis points to 1.91 per cent, from 2.05 per cent a year prior.
As at 9.01 am, its shares declined by 2.1 per cent or S$0.74 to S$35.71, before rebounding to S$36.04 at 9.06 am, down S$0.41. By 9.18 am, the counter was trading 1.4 per cent or S$0.52 down at S$35.93, and fell further to S$35.89 at 9.20 am. At 9.30 am, UOB shares were trading 1.8 per cent or S$0.66 lower at S$35.79, after 2.4 million securities changed hands.
Equity research analyst Tan Yong Hong at Citi has a “neutral” call on UOB with a target price of S$34.70, in the light of the bank’s missed earnings estimate driven by a soft top line. This is considering how broad management guidance for the lender’s net interest margins and loans growth is below Citi’s expectations. Tan’s expected share price return for the counter also stands at -4.8 per cent, as per his Wednesday report.
“We see non-performing loans stable due to elevated upgrades or recoveries. Management also guided earlier to have a general provisions buffer at 80 basis points of performing loans, as compared to the current level of 70 basis points,” said the analyst.
For Q2, the bank’s non-performing loan ratio stood at 1.6 per cent, compared with 1.5 per cent a year prior.
UOB declared an interim dividend of S$0.85 per share for the half-year ended Jun 30, a decrease from S$0.88 in the previous year. A second tranche of the bank’s S$0.50 per share special dividend will also be paid to shareholders.
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