- UOB’s 1H25 core-earnings were behind MIBG and Street expectations. Sharply falling policy rates, weak regional loan growth, an under-invested wealth platform are driving negative growth momentum across pillars.
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Weaker sequential delivery across pillars.
- UOB's 2Q25 NII fell -3% q-o-q, Fees -8% and Other NoII -11% showing broad pressure across all operating segments.
- NIMs fell -9bps q-o-q from sharp SORA and HIBOR contraction. Management is guiding for 1.85%-1.95% NIMs for 2025E, which means more downside risks from current levels. This is also predicated on SORA levelling off at current level. MIBG forecasts a further -43bps fall in SORA from current levels, which could raise further NIM downgrade risks.
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Asset quality resilient. ROEs challenged near-term.
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