Singapore's UOB reports Q4 net profit fell 6.2% to S$739 million amid hit from oil industry exposure

Nicky Loh | Bloomberg | Getty Images

Singapore's United Overseas Bank (UOB) reported on Friday its earnings for the fourth quarter slipped 6.2 percent on-year to 739 million Singapore dollars ($521.75 million).

For the quarter, net interest income was stable at S$1.28 billion, with strong loan growth offset by a 10 basis-point fall in the net interest margin to 1.69 percent.

Non-interest income fell 6.3 percent to S$753 million in the quarter on lower trading and investment income. But fee and commission income rose 10.6 percent to S$531 million on higher credit card and wealth management fees.

Like its two Singapore peers, OCBC and DBS, UOB reported a hit from its oil and gas industry exposure.

Difficulties in the oil, gas and shipping industries led to a S$313 million increase in specific allowances on loans to S$428 million.

The non-performing loan ratio rose slightly to 1.5 percent, from 1.4 percent in the third quarter. Both DBS and OCBC also saw that ratio increase.

The bank's CEO Wee Ee Cheong highlighted that performance was stable despite a subdued growth environment.

"Global uncertainty, slow growth and rapid digital transformation will continue in 2017. However, Asia with its increasing integration and consumer affluence presents opportunities for long-term players such as UOB," Wee said in a statement.

For the full year, UOB's net profit slipped 3.5 percent to S$3.10 billion.

Net interest income rose 1.3 percent to S$4.99 billion for 2016, with UOB citing healthy loan growth in the consumer and the non-bank financial institution customer segments.

Full-year non-interest income slipped 1.6 percent to S$3.07 billion, with trading and investment income falling 8.1 percent on lower earnings from the sale of investment securities, offset by higher trading income.

UOB proposed a final dividend of 35 Singapore cents a share, bringing the total dividend payout for the year to 70 Singapore cents, down from 90 Singapore cents in 2015.

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