United Overseas Bank (U11) H2 2024 earnings summary

Executive summary

• Full-year net profit reached a record S$6.0 billion, up 6% year-over-year, driven by broad-based growth across ASEAN and strong core franchise performance.

• Net interest income remained stable at S$9.7 billion, while fee income reached a new high of S$2.4 billion, up 7% year-over-year.

• Asset quality remained resilient with NPL ratio stable at 1.5% and total credit costs within guidance at 27 basis points.

• Board recommended a total FY24 dividend of S$1.80 per share, with a payout ratio of about 50%.

• S$3 billion capital return package announced, including special dividends and a S$2 billion share buyback over three years.

Financial highlights

• Net interest income stable at S$9.7 billion for the year, offsetting margin compression; net interest margin for FY24 at 2.03%, with Q4 at 2.00%.

• Fee income grew 7% to S$2.4 billion, led by double-digit growth in wealth management and card fees.

• Trading and investment income rose 15% to S$2.0 billion for the year.

• Cost-to-income ratio for FY24 was 42.5%, excluding one-off Citi integration costs.

• Customer loans grew 5% year-over-year to S$338 billion, with broad-based growth in corporates and mortgages.

Outlook and guidance

• 2025 outlook targets high single-digit loan growth, double-digit fee growth, and higher total income.

• Target cost-to-income ratio around 42% and credit costs at 25-30 basis points.

• NIM expected to be maintained at 2% if Fed rate cuts are limited.

• Confident in ASEAN growth momentum and continued expansion, supported by resilient economies and higher domestic retail spending.