United Overseas Bank Limited (SGX:U11), or UOB, is the second Singapore-listed bank to release its business updates for the first quarter of the financial year ended 31 March 2021 (i.e. Q1 FY2021) this morning (06 May 2021) – with DBS having already reported its first quarter business updates last Friday (you can read my review about it here), and Overseas-Chinese Banking Corporation releasing its business updates tomorrow.

Just like DBS, UOB have also changed to half-yearly reporting since 2020. As such, for the current quarter under review, the bank only reported a summary of its financial performance.

In this post, I will be sharing with you my review, along with my thoughts about UOB’s latest financial performance, as well as some of the key financial ratios reported:

Financial Performance (Q1 FY2020 vs. Q1 FY2021)

Q1 FY2020Q1 FY2021% Variation
– Net Interest
Income (S$’mil)
$1,593m$1,529m-4.0%
– Net Fee & Commission
Income (S$’mil)
$515m$638m+23.9%
– Other Non-Interest
Income (S$’mil)
$298m$319m+7.0%
Total Income
(S$’mil)
$2,407m$2,486m+3.3%
Total Expenses
(S$’mil)
$1,086m$1,089m+0.3%
Net Profit
Attributable to
Shareholders (S$’mil)
$855m$1,008m+17.9%

On the whole, it was an improved set of first quarter results reported by the bank, with its total income and net profit up, and at the same time, its total expenses remain unchanged.

One thing to note is that, its net fee and commission income of S$638m recorded in Q1 FY2021 was a record high, and this was attributed to improvements in its wealth management, as well as in its loan-related and investment banking activities.

The only negative (and a slight one in my opinion) was its net interest income, due to impacts of interest rate cuts on margins across the region – but on the bright side, its consumer loans have gone up along with the picking up of business activities.

Key Financial Ratios (Q4 FY2020 vs. Q1 FY2021)

Moving on, let us take a look at some of the key financial ratios reported by the bank for the first quarter of 2021 ended 31 March 2021, compared against that reported in the previous quarter three months ago – i.e. the fourth quarter of 2020 ended 31 December 2020, to find out if it has improved, remained consistent, or deteriorated:

Q4 FY2020Q1 FY2021Difference (in
Percentage Points)
Net Interest
Margin (%)
1.57%1.57%
Return on
Assets (%)
0.65%0.93%+0.28pp
Return on
Equity (%)
7.0%10.2%+3.2pp
Non-Performing
Loans Ratio (%)
1.6%1.5%-0.1pp

My Observations: Compared to the previous quarter, the bank’s key financial ratios have improved. Particularly, there are two things that stood out:

  • Its non-performing loans ratio have gone back to the level reported in FY2018 and FY2019 – which was before the pandemic, at 1.5%.
  • Its return on equity have went up by 3.2pp compared to the previous quarter to 10.2%

Closing Thoughts

In case you’re wondering why I did not talk about dividends, the reason is because UOB pays out a dividend to its shareholders on a half-yearly basis (i.e. when it reports its financial results for the second, as well as for the fourth quarter.)

As far as its financial results and key financial ratios are concerned, it was a much improved one. Personally, I am positive of the bank continuing to report an improved set of results in the subsequent quarters ahead as the economy gradually recovers (even though its likely to be a slow one) from the Covid-19 pandemic.

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Disclaimer: At the time of writing, I am a shareholder of United Overseas Bank Limited.