Shares of United Overseas Bank (UOB), one of the three major banks in Singapore, hit a record high on Wednesday following strong profit growth.
UOB’s stock price rose 1.4% to 39.20 Singapore dollars ($29.17) after the bank reported a record net profit of 6 billion Singapore dollars ($4.47 billion) for the year ended Dec. 31, 2024, up 6% from a year ago.
The bank’s performance was driven by strong net fee income, and trading and investment income. UOB’s net fee income grew 7% to 2.4 billion Singapore dollars ($1.79 billion), led by wealth, credit card, and loan-related fees.
“Our long-term investments in regional platforms and capabilities are paying off, and we expect continued revenue growth this year,” said Wee Ee Cheong, UOB’s deputy chairman and CEO, in a statement.
But Wee also acknowledged current global macro uncertainties and said the bank is counting on its investments in Southeast Asia to drive growth.
“Our strengthened market position in our key ASEAN markets, enlarged customer base, and enhanced platforms will position us well to seize regional opportunities amid a reconfiguration of global trade and supply chains,” Wee said.
Unlike the other two major Singapore banks, DBS and OCBC, UOB has placed a bigger bet on Southeast Asia as part of the bank’s growth strategy.
For instance, UOB acquired Citi’s consumer business in Indonesia, Malaysia, Vietnam, and Thailand in 2022 as part of a strategy to scale up its retail business in the region outside Singapore. The bank also said at its corporate day in August that it wants to be the number one cross-border trade bank for Southeast Asia for its wholesale banking operation.
The other two major banks have not ignored ASEAN, but have also worked on expanding operations in India and Greater China.
Singapore’s other major banks
UOB is the second of the three major banks to report. DBS also reported a “record performance” last week that was driven by its wealth management business and an increase in loans. OCBC reports next week.
Shareholders have been the beneficiary of the two bank’s positive results. DBS announced a capital dividend return package last week, and on Wednesday, UOB announced a 3 billion Singapore dollar ($2.23 billion) package to distribute surplus capital over the next three years.
The package comprises special dividends and a share buyback. UOB is proposing a special dividend of 50 cents ($0.37) per ordinary share in 2025, amounting to about 800 million Singapore dollars ($596 million), and a new share buyback program of 2 billion Singapore dollars ($1.49 billion).
