Friday, February 23, 2024

UOB FY2023 Earning Result

United Overseas Bank ("UOB") reported their FY2023 earning result yesteday [here].  Here is a quick dive into the numbers:

Numbers in S$ million unless stated otherwise.
Full Year Ending 31 Dec 2023 31 Dec 2022 % Change
Total Income 13,932 11,575 20.3
Profit Before Tax 7,303 6,050 20.7
Net Profit 5,711 4,573 24.9
EPS (S$) 3.34 2.69 24.2
DPS (S$) 1.70 1.35 25.9

FY2023 total income hit S$13.9B due to higher net interest income, record card fees and strong performance in treasury customer flows, trading and investment activities.  NII up 16.0% y/y to S$9.68B.  NIM up 23 bps y/y, but down 7 bps q/q to 2.09%.  Fee income up 4.3% to S$2.24B, of which credit card fees grew 66% y/y and wealth management income grew 13% y/y.  Trading and investment income surged 204% y/y to S$1.69B.  NPL ratio remained stable at 1.5%.  FY2023 core ROE up 2.3% y/y to 14.2%.  A final dividend of 85 cents per share was declared, Ex Date: 25 Apr 2024.  This brings FY2023 total dividend to S$1.70 (FY22: S$1.35).

UOB completed integration of Citi's Malaysia and Indonesia units.  Integration of Citi's Thailand unit is slated to complete in Q2 2024.  Management projects low single-digit loan growth and double-digit fee growth in 2024.

My Thoughts
UOB has logged a stellar FY2023 performance, similar to DBS.  A higher final dividend was declared, which should bring cheer to many shareholders.  UOB's tie-up to Taylor Swift and Ed Sheeran concert gigs boosted its card income.  Unfortunately, the share price has run up quite a bit, given the U.S. Fed has pushed back on cutting interest rate in the near term, which is a boon for the banks.  Will continue to monitor for price retracement, which is likely to occur when the Fed starts trimming interest rate.

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