UOB's first-quarter profit falls 19% to 2-year low, raises impairment charges

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UOB's first-quarter profit falls 19% to 2-year low, raises impairment charges
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SINGAPORE: United Overseas Bank reported a smaller-than-expected 19 per cent drop in first-quarter net profit on Wednesday (May 6), but it ...

SINGAPORE: United Overseas Bank reported a smaller-than-expected 19 per cent drop in first-quarter net profit on Wednesday , but it increased impairment charges to reflect worsening economic conditions due to the coronavirus outbreak.

UOB said its impairment charges rose to S$286 million in the three months to Mar 31 from S$93 million a year earlier and it booked an additional regulatory loss allowance reserve of S$260 million, up five times from a year ago.Net profit at Singapore's third-largest listed lender dropped to S$855 million in the latest quarter from S$1.05 billion a year earlier, compared with an average estimate of S$739.3 million from three analysts, according to Refinitiv data.

The bank said more than three-quarters of its workforce in Singapore are working from home during the COVID-19 outbreak. Across the region, around 19,000 staff members are working from home. UOB said that as of end-March, outstanding oil and gas loans stood at S$10.2 billion, representing 3.6 per cent of total loans, as compared with 4.7 per cent on Jun 30, 2018.

Three-quarters of its O&G exposure is to downstream players and traders, of which 70 per cent are national oil companies and global firms. The remaining exposure is mainly short-term structured exposure, it added.DBS last week reported a 29 per cent year-on-year drop in net profit for the first quarter to S$1.17 billion.Source: Reuters/CNA/aj

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