-- UOB reports 2Q net profit of S$713 million, up from S$636
million a year earlier
-- UOB CEO flags interest in ING's Asian asset management
business
-- UOB Chairman Wee Cho Yaw to step down next year
(Recasts and adds details throughout)
By Sam Holmes
SINGAPORE--Singapore's United Overseas Bank Ltd. (U11.SG)
Tuesday reported a 12.1% rise in second-quarter net profit, beating
analyst estimates, on the back of higher loan volumes and fee
income, and flagged its interest in Dutch bank ING Groep NV's (ING)
asset management business as it seeks to expand its regional
footprint.
The bank also announced the resignation of its 83-year-old
chairman Wee Cho Yaw, effective at next year's annual general
meeting in April. Hsieh Fu Hua, formerly a president with the
city-state's state investment firm Temasek Holdings and chief
executive with the Singapore Exchange Ltd. (S68.SG), was named as
Mr. Wee's replacement as non-executive chairman.
Net profit for the three months ended June 30 was 713 million
Singapore dollars (US$574 million), up from S$636 million a year
earlier, Singapore's third-largest bank by assets said in a
statement. The result was higher than the average estimate of S$614
million from five analysts polled by Dow Jones Newswires.
"The good thing is we are growing strongly in fees, which helped
offset margin pressure," UOB Chief Executive Wee Ee Cheong
said.
Net interest income rose 7.4% to S$981 million from S$913
million, while non-interest income rose 20% to S$629 million from
S$524 million.
Singapore's banks, like their Hong Kong counterparts, have faced
persistent headwinds from contracting net interest margins over the
past three years but have managed to bolster earnings by supporting
loans volumes, more recently through stronger U.S.
dollar-denominated trade finance growth.
In spite of some signs of stabilization late last year and
earlier this year, spreads fell again in the second quarter owing
to the accentuated low world-wide interest-rate environment. UOB's
net interest margin fell six basis points to 1.92% from the first
quarter. Local peers DBS Group Holdings Ltd. (D05.SG) and
Oversea-Chinese Banking Corp. Ltd. (O39.SG) also both reported
deterioration in their second quarter net interest margins last
week but managed to offset these pressures with stronger loans
growth.
Mr. Wee, who is the son of the outgoing chairman, said the group
is looking to take advantage of expansion opportunities in the
region as they arise and the bank is interested in the regional
asset management business of ING.
The Dutch financial-services company is taking bids for its
Asian asset management arm in the region as part of its wider plan
to restructure following its bailout by the Dutch state during the
2008 global financial crisis.
"ING, yes, we are interested in, with a lot depending on the
price," Mr. Wee said.
"For the wealth management piece, we are also actively looking
at it, but in the meantime we are growing organically."
Mr. Wee added his father's resignation is part of the board's
broader succession plan. The elder Mr. Wee was appointed chairman
and CEO of the bank in 1974. His son assumed the CEO position in
2007.
UOB said the elder Mr. Wee would be given the honorary title of
Chairman Emeritus and would be a director with the bank.
Write to Sam Holmes at samuel.holmes@dowjones.com
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