We remain watchful of asset quality risks in an environment of slower global growth amidst concerns of accelerating Fed cuts, on top of UOB’s commercial real estate (CRE) exposures.
UOB’s average loan-to-value (LTV) for office CRE continues to be ~50%, providing a buffer in the event underlying collateral valuations collapse.
UOB's 2Q25 revenue and net profit missed consensus.
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Net interest income (NII) moderated to S$2,336mil (-3% y-o-y, -3% q-o-q) as asset growth cushioned effects of sharp decline in benchmark rate. Net interest margin (NIM) declined 9bps q-o-q to 1.91% (1Q25: Stable q-o-q at 2.00%) on lower asset yields amid declining benchmark rates.
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Non-interest income rose 5% y-o-y but declined 10% q-o-q.
Net fee income stood at S$636mil (+3% y-o-y, -8% q-o-q), normalising from last quarter’s record high, as wealth fees was affected by investors’ cautious approach amid macroeconomic uncertainties. Other non-interest income of S$493mil (+8% y-o-y, -11% q-o-q) was driven by lower trading and liquidity management activities.
Lower credit cost of 32bps; 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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