Along with Overseas Chinese Banking Corporation (you can read my review on the Singapore bank’s latest results release here), United Overseas Bank, or UOB (SGX:U11) also released its latest results for the first half of the financial year 2021 ended 30 June 2021 before trading hours this morning.

Similar to my review post on OCBC’s latest results, in this post, I’ll be reviewing UOB’s latest ‘report card’ in terms of its financial performance (where I will be comparing the financial figures reported for the first half of FY2021 against that reported in the same time period last year – i.e. 1H FY2020), key financial ratios (where I will be reviewing the ratios recorded for the current quarter against the previous quarter 3 months ago – i.e. Q1 FY2021), along with its interim dividend payout (I’m sure this is something on the minds of fellow shareholders – particularly after the announcement by the Monetary Authority of Singapore, or MAS, last week that they will be lifting the caps on dividend payouts by the banks and financial institutions fully.)

Let’s begin…

Financial Performance (1H FY2020 vs. 1H FY2021)

In the table below, you will find UOB’s key financial figures reported for the first half of the financial year 2021 (ended 30 June 2021) compared against the same time period last year (i.e. first half of the financial year 2020 ended 30 June 2020):

1H FY20201H FY2021% Variance
– Net Interest
Income (S$’mil)
$3,050m$3,107m+1.9%
– Net Fee &
Commission Income
(S$’mil)
$960m$1,234m+28.5%
– Other Non-Interest
Income (S$’mil)
$657m$563m-14.3%
Total Income
(S$’mil)
$4,667m$4,903m+5.1%
Total Expenses
(S$’mil)
$2,126m$2,146m+0.9%
Net Profit Attributable
to Shareholders
($’mil)
$1,558m$2,011m+29.1%

Apart from a fall in its other non-interest income (due to lower trading income), all the other financial statistics saw year-on-year improvements – of note, its net fee and commission income, at S$1,234m, is a new high for the bank (and the huge improvements is helped by wealth management fees reaching record levels amid returning investor confidence on market recovery.)

Along with a bigger percentage increase in terms of its total income vs. its total expenses, coupled with a huge drop in its total allowances (at just S$383m compared to S$682m a year ago), its net profit attributable to shareholders climbed 29.1% to S$2,011m.

Key Financial Ratios (Q1 FY2021 vs. Q2 FY2021)

Compared to the previous quarter three months ago, has UOB’s key financial ratios improved or deteriorated? Let us find out in the table below:

Q1 FY2021Q2 FY2021Difference (in
Percentage Points – pp)
Net Interest
Margin (%)
1.57%1.56%-0.01pp
Return on
Assets (%)
0.93%0.92%-0.01pp
Return on
Equity (%)
10.2%10.1%-0.01pp
Non-Performing
Loans Ratio (%)
1.5%1.5%

My Observation: On one look, I’m sure you’ll agree with me that compared to the previous quarter, its key financial ratios have weakened slightly (apart from its non-performing loans ratio, which has remained consistent.) But personally, as the drop is minimal, I’m not too concerned.

Dividend Payout (1H FY2020 vs. 1H FY2021)

The following table is the bank’s interim dividend payout for FY2021 compared to the previous year:

1H FY20201H FY2021% Variance
Dividend Per Share
(S$’cents/share)
39.0 cents60.0 cents+53.8%

Along with MAS lifting the cap on the banks’ dividend payout to its shareholders, and with the CEO Mr Wee Ee Chong mentioning during the AGM that the bank will pay out 50.0% of their earnings as dividends should the dividend cap be removed, an interim dividend payout of 60.0 cents/share was declared – and in case you’re wondering, the dividend payout is slightly higher compared to an interim dividend payout of 55.0 cents/share in FY2019 – something which I’m sure fellow shareholders will be happy to note.

Also, for those who are wondering if there are any scrips this time round, I note that the bank will not be offering any.

If you are a shareholder of the bank, here are the dates regarding its dividend payout you need to take note of:

Ex-Date: 16 August 2021
Record Date: 17 August 2021
Payout Date: 27 August 2021

Closing Thoughts

On the whole, I felt the latest set of results was a decent one for the bank. What impressed me the most was its interim dividend payout – where it is slightly higher than the amount declared in FY2019, which is before the pandemic.

No doubt the key financial ratios I have looked at have weakened slightly, but personally, I’m not too overly concerned as it is just a very small dip.

Looking ahead, I am of the opinion that the worst (regarding the pandemic) is already beyond us, and we should see a gradual recovery from here on – even though it will likely be an uneven one – and with that, I am confident that bank’s financial ratios will also eventually log improvements.

With that, I have come to the end of my review of UOB’s latest 1H FY2021 results. Do note that everything you have read above (including my personal opinions on the banks results and outlook ahead) is purely my own and am sharing them for educational purposes only. They are by no means a buy or sell recommendation for the bank’s shares. You should always do your own due diligence before you make any investment decisions.

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

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