UOB (SGX:U11)'s 2Q23 revenue ~5% ahead of consensus while net profit in line with consensus. 2Q23 revenue grew 31% y-o-y/1% q-o-q to S$3,542m and net profit improved 27% y-o-y/declined 6% q-o-q to S$1,415m. Core net profit after tax, excluding Citi integration costs (net of tax) of S$92m, would be S$1,507m (+35% y-o-y/-4% q-o-q).
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Operating costs increased 22% y-o-y/1% q-o-q, resulting in a cost-to-income ratio excluding/including one-off Citi integration costs of 40.9%/44.1% (1Q23: 40.9%/43.3%), respectively. Capital ratios stood strong with a CET1 ratio of 13.6%.
Non-interest income improved on another quarter of record-high trading and investment income, partially offset by lower net fee income.
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Trading and investment income of S$478m (+123% y-o-y/flat q-o-q) saw another record quarter, customer-related treasury income of S$182m (+5% y-o-y/-10% q-o-q) was supported by hedging demand, while other trading and investment income of S$296m (+622% y-o-y/+8% q-o-q) saw good performance in trading and liquidity management activities.
Higher credit cost of 30bps; NPL stable at 1.6%.
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
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