SINGAPORE:'' Singapore's United Overseas Bank , Southeast Asia's third-largest lender, posted a 13 percent fall in first quarter net profit on Friday, May 6, hurt by rising costs, low interest rate margins and an absence of one-off gains.
UOB earned S$612 million ($493.2 million) in the three months ended March, down from S$700 million in the year-earlier period. Its results were below the average estimate of S$625 million of six analysts polled by Reuters.
The bank's net interest margin -- the difference between the interest rate the bank charges and what it pays depositors -- was 1.90 percentage points compared with 1.91 in the fourth quarter and 2.25 a year ago.
"Whilst the global economy continues to grapple with various shocks, our core markets remain buoyant, reflecting the strong regional economic fundamentals and rising affluence in Asia," CEO Wee Ee Cheong said in a statement.
The bank said loans growth gained further traction with a 7 percent quarter-on-quarter increase and a 19 percent growth year-on-year.
Singapore banks have seen strong loans growth over the past year but this has not translated into higher earnings due to interest rates hovering near all-time lows.
According to data from the Monetary Authority of Singapore, the three-month interbank bank has been hovering around 0.44 percent since October last year, down from 0.69 percent at the start of January 2010.
UOB shares have risen around 4.2 percent so far this year, beating the broader market's 3 percent fall. ($1 = 1.241 Singapore Dollars) - Reuters
UOB earned S$612 million ($493.2 million) in the three months ended March, down from S$700 million in the year-earlier period. Its results were below the average estimate of S$625 million of six analysts polled by Reuters.
The bank's net interest margin -- the difference between the interest rate the bank charges and what it pays depositors -- was 1.90 percentage points compared with 1.91 in the fourth quarter and 2.25 a year ago.
"Whilst the global economy continues to grapple with various shocks, our core markets remain buoyant, reflecting the strong regional economic fundamentals and rising affluence in Asia," CEO Wee Ee Cheong said in a statement.
The bank said loans growth gained further traction with a 7 percent quarter-on-quarter increase and a 19 percent growth year-on-year.
Singapore banks have seen strong loans growth over the past year but this has not translated into higher earnings due to interest rates hovering near all-time lows.
According to data from the Monetary Authority of Singapore, the three-month interbank bank has been hovering around 0.44 percent since October last year, down from 0.69 percent at the start of January 2010.
UOB shares have risen around 4.2 percent so far this year, beating the broader market's 3 percent fall. ($1 = 1.241 Singapore Dollars) - Reuters
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