UOB in 'Strong Position' Heading Into Next Year, CEO Says

By Megan Cheah

United Overseas Bank remains "in a strong position" going into next year, the chief executive of Singapore's third-largest lender said after its latest earnings showed a sharp drop in net profit.

The bank on Thursday posted a 72% fall in third-quarter net profit as it booked pre-emptive general provisions. Its stock fell close to 5% after the results before paring losses.

While the results may look bad on the surface, UOB Chief Executive Wee Ee Cheong said the bank's financial position is solid, likening booking the provisions to buying insurance for what lies ahead.

The provision brings UOB's allowance for credit and other losses to 1.36 billion Singapore dollars, or about US$1.04 billion, more than quadrupling from a year ago.

UOB is taking a "long-term" view in ensuring its balance sheet remains strong, Wee said at a briefing following the results. The pre-emptive provision won't weigh on its final dividend this year, he added.

Wee expects loan growth in the low single digits and fee gains in the high single to double digits for 2026.

The lender projects total credit costs at 25 basis points to 30 basis points next year. Third-quarter total credit costs were elevated at 134 basis points, thanks to the allowances, compared with 34 basis points a year ago.

Analysts have a bearish lens on UOB compared with peer DBS Group, which also reported results Thursday.

UOB's net interest income is likely to decline in 2026, compared with likely gains by DBS and Oversea-Chinese Banking Corp., said Citi analyst Tan Yong Hong.

Tan reiterated his overweight view on DBS and underweight view on UOB, given the banks' asset quality.

OCBC is due to release results Friday.

Write to Megan Cheah at megan.cheah@wsj.com

(END) Dow Jones Newswires

November 06, 2025 02:27 ET (07:27 GMT)