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UOB is betting on ASEAN markets to drive growth in 2026 amid global tariff and geopolitical uncertainties. The bank reported a 7% fall in Q4 net profit to SGD 1.41 billion (USD 1.11 billion), exceeding analyst estimates, with margin pressures offsetting loan growth. Net interest margin declined to 1.89%, while net fee income reached a record SGD 2.6 billion, supported by wealth management and loan fees. Trade loans grew 26%, and assets under management for high-net-worth clients rose 6%. Credit risks remain in Greater China and the U.S., mainly in commercial real estate.
Singapore's United Overseas Bank (UOB) is focusing on its presence in ASEAN to drive growth in 2026, leveraging opportunities from shifting global trade flows amid ongoing tariff and geopolitical uncertainties. The bank's leadership highlighted that markets in Malaysia, Thailand, Indonesia, and Vietnam performed well, providing a buffer against broader challenges. Advertisement
In the fourth quarter, UOB's net profit fell 7% year-on-year to SGD 1.41 billion (USD 1.11 billion), though it exceeded the average analyst estimate of SGD 1.35 billion. The decline was mainly due to margin pressures that offset loan growth. For the full 2025 financial year, net interest margin dropped to 1.89% from 2.03% the previous year, while net interest income decreased 3% to SGD 9.36 billion.
Net fee income rose 7% to a record SGD 2.6 billion, driven by wealth management and loan-related fees amid favourable market conditions and rising consumer confidence. Net new money inflows remained positive, with high-net-worth assets under management increasing 6% to SGD 201 billion in 2025. UOB's third-quarter results had earlier shown a 72% slump in net profit, with the bank citing lower credit costs as a factor in the recent rebound.
CFO Leong Yung Chee noted that credit-cost pressure persists in Greater China and the United States, mainly linked to commercial real estate exposures. UOB declared a final dividend of SGD 0.71 per share, bringing total annual dividends to SGD 1.56 per share including an interim dividend of SGD 0.85 per share. Following the results, UOB shares dropped nearly 4%, underperforming the Singapore benchmark index, which fell 0.7%. Analysts at CGS International maintained a hold rating, pointing to potential downside from weaker ASEAN growth and further provisioning for the Greater China commercial real estate portfolio.
On trade, UOB executives remain optimistic about intra-ASEAN activity. The bank's trade loans, which make up about 13% of its total loan book, grew 26% year-on-year. These loans have also supported cross-selling opportunities in foreign exchange, hedging, and cash management, and the bank plans to continue focusing on this segment due to its capital-efficient nature and positive impact on other business areas.
While UOB maintained its 2026 outlook, it adjusted fee growth expectations to high single digits, down from previous projections of high single-to double-digit growth. Leong attributed the revision to a more conservative growth outlook, even as trends in wealth, consumer spending, and customer treasury remain supportive.
Source Reuters
5th Jun, 2025
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