UOB adjusts its 2024 loan growth forecast, while its fourth-quarter profit surpasses expectations.

Singapore's 2024 loan growth projections were cut to low single-digits on Thursday after posting a stronger-than-forecast 22% jump in fourth quarter net profit.

UOB CEO Wee Ee Cheong's earnings presentation slides revealed that the bank maintained its 2024 guidance for double-digit fee growth while projecting total income to see positive growth.

The credit costs for 2024 are predicted to be at the lower end of the previously stated range of 25 to 30 basis points.

In a statement, Wee said that although the global economic outlook is uncertain in the short term, Southeast Asia remains a promising region.

Improved domestic demand, robust tourism recovery, and strong investment flows into the manufacturing sector are driving our optimism about ASEAN's potential, as companies reconfigure their supply chains.

Our base case is for Singapore's central bank to start easing policy in April at the earliest: HSBC

Singapore's banks, the largest in Southeast Asia, are expected to post higher profits for the fourth quarter due to higher interest rates. However, growth momentum may slow as global central banks shift towards rate cuts and volatile markets affect their core wealth business.

This month, a larger peer reported a 2% increase in fourth quarter net profit that surpassed forecasts. However, the projected net interest margin for 2024 is expected to be slightly lower than the previous year, as interest rates are anticipated to decrease.

is due to announce its results on Feb. 28.

UOB, Southeast Asia's third-largest bank by assets, reported a net profit increase of SG$250 million ($164 million) in October-December compared to the previous year.

The actual revenue of SG$1.37 billion exceeded the mean estimate of three analysts surveyed by LSEG.

The bank advised paying a final dividend of 85 cents per share, resulting in a total dividend of SG$1.70 per share for 2023.

UOB's net interest margin increased from 1.86% to 2.09% in 2023, indicating improved profitability.

The bank reported a 14% increase in its wealth asset under management, reaching SG$176 billion.

by Reuters 2/22/2024, 1:08:05 AM

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