Singapore bank UOB's fourth-quarter net profit falls 7%, but beats forecasts (updated)

United Overseas Bank

23/02/2026 23:10

UOB's top executives positive on ASEAN growth

Q4 net profit at S$1.41 bln vs S$1.35 bln estimate

Net interest margin at 1.89% in 2025 vs 2.03% in 2024

Trade loans another area of focus for the bank

Recasts first paragraph, updates throughout with details, comments from executives, analyst

By Rae Wee and Yantoultra Ngui

SINGAPORE, Feb 24 (Reuters) - Singapore's United Overseas Bank, or UOB UOBH.SI, said on Tuesday it will leverage its presence in ASEAN and opportunities from shifting global trade flows to drive growth in 2026, against the backdrop of tariff and geopolitical turbulence.

The remarks from the bank's top executives came after Southeast Asia's third-largest bank by assets reported a 7% fall in net profit in the fourth quarter from a year earlier, as margin headwinds outweighed loan growth.

Net profit for October-December dropped to S$1.41 billion ($1.11 billion) from S$1.52 billion a year earlier, though it beat the mean estimate of S$1.35 billion from three analysts polled by LSEG.

Speaking at the bank's results briefing, CEO Wee Ee Cheong said UOB's "ASEAN 4" markets - Malaysia, Thailand, Indonesia, and Vietnam - were a bright spot for the lender last year, with total income there up 5% even as the group's total income fell 3%.

"The market is very uncertain. The biggest risk is something that is a little bit beyond our control. But (for) the ASEAN we are talking about, I feel quite confident," he said.

        For the full 2025 financial year, UOB's net interest margin, a key gauge of profitability, dropped to 1.89% from 2.03% a year earlier. Its net interest income slid 3% year-on-year to S$9.36 billion.

Net fee income rose 7% to a new record of S$2.6 billion, helped by wealth management and loan-related fees amid favourable market conditions and rising consumer confidence.

Net new money inflows also stayed positive, with high-net-worth assets under management rising 6% from the previous year to S$201 billion in 2025.

The results followed a 72% slump in its third-quarter net profit, with UOB attributing the rebound to lower credit costs.

Still, credit-cost "hot spots" remain in Greater China and the United States, tied mainly to commercial real estate exposures, said CFO Leong Yung Chee.

UOB declared a final dividend of S$0.71 per share. Alongside an interim dividend of S$0.85 per share, that brings its total dividend for the year to S$1.56 per share.

Shares of UOB fell nearly 4% on Tuesday, underperforming the Singapore domestic benchmark's .STI 0.7% decline.

Analysts at CGS International said in a note that they reiterate their "hold" call on UOB, citing a lack of additional capital return initiatives and potential downside risks from a weaker ASEAN economic outlook and further provisioning for the bank's Greater China commercial real estate portfolio.

CAPITALISING ON SHIFTING SUPPLY CHAINS

On the global trade outlook, the bank's executives were sanguine that intra-regional trade would remain robust even amid broader uncertainties.

U.S. President Donald Trump's tariff salvo has dominated markets since he took office last year, with the latest Supreme Court ruling and his subsequent response throwing the situation into deeper uncertainty.

"I think there will be some time required for the system to absorb, comprehend and react to it. But we are confident ... the companies' business activites will find a way to navigate through," said Leong.

The bank's trade loans, which constitute about 13% of the group loan book, grew about 26% year-on-year, and helped drive cross-selling into FX, hedging and cash management.

It is an area the lender is aiming to focus on, the executives said, citing its "capital friendly" nature and positive spillovers for the broader business.

        UOB broadly maintained its outlook guidance for 2026, except it now sees high single-digit fee growth for the year versus the high single-to double-digit fee growth that was projected in November.

When asked why, Leong said the shift was mainly due to a more conservative lower growth outlook, even as wealth, consumer spending and customer treasury trends remain supportive.

($1 = 1.2661 Singapore dollars)

 (Reporting by Rae Wee and Yantoultra Ngui; Editing by Sonali Paul and Kim Coghill)

 ((Rae.Wee@thomsonreuters.com;))