A major drop in credit losses coupled with a robust rise in total income drove UOB’s annual profits higher in 2021.
UOB posted a net profit after tax of S$4.07 billion in 2021, according to its annual financial results, marking a 40 percent year-on-year increase.
This was driven in no small part by a major drop in allowances – 58 percent decrease to S$657 million – with the non-performing loan ratio steady at 1.6 percent.
Record Fee Income
UOB also recorded a significant rise in income at 7 percent to S$9.79 billion which included a record high fee income of S$2.4 billion (21 percent increase) due to strong performance in wealth and loan-related activities.
Net interest income also climbed 6 percent to S$6.39 billion.
Operating expenses grew 3 percent to S$4.31 billion.
«The Worst is Behind Us»
According to UOB’s deputy chairman and chief executive Wee Ee Cheong, the overall operating environment as stabilized in the third year of the pandemic, enabling a rebound in the bank’s profits after following a 33 percent drop in 2020.
«We believe the worst is behind us In Singapore, there are signs of market recovery where we see strong institutional loan growth and a rebound in card spending and wealth management activities,» Wee said.
«We see significant upside in Southeast Asia, though the pace of recovery may vary by country. Our confidence in the region is underscored by our continued efforts to deepen our customer franchise and to build scale, through organic growth and acquisition.»
Acquisition of Citi Business
On UOB’s recent acquisition of Citi’s consumer business in Indonesia, Malaysia, Thailand and Vietnam, Wee said that the move «came at the right time, with the right strategic fit» with expectations to double the retail customer base across the four markets.
The bank will also continue to invest in capabilities such as supply chain, sustainability and digitalization to tap the structural growth trends in the region.
