UOB’s board recommends a final dividend of 92 cents per ordinary share for 2HFY2024, along with a special dividend of 50 cents per ordinary share.

United Overseas Bank (UOB) has posted a record net profit of $6.0 billion for FY2024 ended Dec 31, 2024, up 6% y-o-y. 

In a Feb 19 announcement, UOB says this was driven by strong net fee income and trading and investment income. 

Full-year net interest income (NII) remained steady at $9.7 billion as a healthy loan growth of 5% y-o-y was moderated by the effects of interest rate movements on our net interest margin. 

Full-year net fee income grew 7% y-o-y to $2.4 billion, led by a double-digit growth in wealth fees, stronger credit card fees and higher loan-related fees. 

Asset quality remained stable with a non-performing loan (NPL) ratio of 1.5%.

UOB’s board recommends a final dividend of 92 cents per ordinary share. Together with the interim dividend of 88 cents per ordinary share, the total dividend for FY2024 will be $1.80 per ordinary share, representing a payout ratio of approximately 50%. 

As part of the bank’s capital distribution strategy, the board announced a $3 billion package to distribute surplus capital over the next three years. The package comprises special dividends and share buybacks. 

The board has also recommended a special dividend of 50 cents per ordinary share in 2025, distributing $0.8 billion of UOB’s surplus capital. This is also to mark the bank’s 90th anniversary. 

The 92-cent final dividend and half of the 50-cent special dividend will go ex on April 29 and will be paid on May 13. 

The remaining 25 cents in special dividend will go ex on Aug 18 and will be paid on Aug 28.

In addition, a new share buyback programme of $2 billion has been introduced, which will span three years until 2027. 

4QFY2024 results

Sequentially, 4QFY2024 net profit was 5% lower q-o-q at $1.5 billion. Net profit excluding one-off expenses was also at $1.5 billion, as Citi integration costs tapered off.

4QFY2024 NII held steady q-o-q at $2.5 billion. Net interest margin (NIM) narrowed to 2.00% on lower benchmark rates offset by loan growth of 1%. 

Net fee income eased q-o-q from last quarter’s high to $567 million due to the seasonal slowdown in loan-related and wealth activities. Other non-interest income normalised to $443 million, after an “exceptional” 3QFY2024 that benefitted from market volatilities, says the bank.

Total core operating expenses declined 2% q-o-q for the quarter to $1.6 billion with the cost-to-income ratio at 45.0%.

Total allowance decreased to $227 million, mainly due to write-back of general allowance previously set aside. Total credit costs on loans was at 25 basis points (bps) for this quarter.

The group’s capital position remained strong with common equity tier-1 (CET-1) capital adequacy ratio at 15.5% for the quarter. 

Liquidity remained healthy with this quarter’s average all-currency liquidity coverage ratio at 143% and net stable funding ratio at 116%, both well above regulatory requirements. Loan-to-deposit ratio was healthy at 82.7%. 

Wee Ee Cheong, UOB’s deputy chairman and CEO, says the group’s long-term investments in regional platforms and capabilities are paying off, and he expects continued revenue growth this year. 

“In 2024, we completed the integration of our Citigroup portfolio in Thailand, following successful integrations in Malaysia and Indonesia in 2023. Integration for Vietnam is on track to be completed by this year. We will continue to harness cross-sell synergies, manage costs and enhance our products and solutions to better serve our expanded customer base,” he adds.

This year marks UOB’s 90th anniversary. “We have come so far thanks to the unwavering support of our stakeholders, partners and customers. We will continue our disciplined approach to pursuing long-term growth with stability, ensuring we bring greater value to everyone we serve,” says Wee.

Shares in UOB closed 4 cents higher, or 0.1% up, at $38.65 on Feb 18.