Brief Overview:

With a slightly more than 90 years of experience in the banking sector, United Overseas Bank Limited (SGX: U11), or UOB, is a leading financial institution in Asia.

Headquartered in Singapore, UOB operates through banking subsidiaries in China, Indonesia, Malaysia, Thailand, and Vietnam, and boasts a global presence with nearly 430 branches and offices across 19 markets. Its primary focus, however, remains on ASEAN.

The bank holds prestigious global rankings, with credit ratings of Aa1 from Moody’s Investors Service and AA- from both S&P Global Ratings and Fitch Ratings.

Financial Figures (1Q FY2025 vs. 1Q FY2026):

	1Q FY2025	1Q FY2026	% Gain/Loss
– Net Interest Income (S$’mil)	$2,409m	$2,324m	-3.5%
– Net Fee & Commission Income (S$’mil)	$694m	$637m	-8.2%
– Other Non-Interest Income (S$’mil)	$554m	$462m	-16.6%
Total Income (S$’mil)	$3,657m	$3,423m	-6.4%
Total Expenses (S$’mil)	$1,559m	$1,523m	-2.3%
Net Profit (S$’mil)	$1,490m	$1,437m	-3.6%

This marked the 3rd consecutive quarter in which UOB recorded a year-on-year decline in both total income and net profit.

Net interest income fell 3.5% year on year to S$2,324 million, largely due to lower benchmark rates, which decreased from 2.00% in 1Q FY2025 to 1.82% in 1Q FY2026. This decline was partially mitigated by a healthy 4% growth in loans.

Net fee and commission income dropped 8.2% from last year’s record S$694 million to S$637 million, reflecting weaker investment banking and loan-related activities amid a cautious, risk-averse market environment.

Other non-interest income also declined, down 16.6% year on year to S$462 million, mainly driven by softer trading and investment returns.

Total expenses fell 2.3% year on year, in line with the moderation in income and ongoing cost discipline.

Key Financial Ratios (4Q FY2025 vs. 1Q FY2026):

	4Q FY2025	1Q FY2026	Difference (in Percentage Points – pp)
Net Interest Margin (%)	1.84%	1.82%	-0.02pp
Return on Equity (%)	11.7%	11.5%	-0.2pp
Non-Performing Loans Ratio (%)	1.5%	1.5%	–

UOB’s net interest margin moderated further, declining 0.02 percentage points from the previous quarter to 1.82%, as expected amid lower benchmark borrowing rates.

Non-performing assets fell 3.1% quarter on quarter to S$5,276 million, down from S$5,440 million, while the non-performing loan ratio remained steady at 1.5%. Notably, this marked the 2nd consecutive quarter of decline in non-performing assets, following a peak of S$5,809 million in 3Q FY2025.

CEO Mr Wee Ee Cheong’s Comments & Outlook (from the Bank’s Press Release):

“The Group delivered a steady performance in the first quarter, reflecting the underlying strength of our core business and diversified income streams. Asset quality was resilient and our balance sheet stayed strong with robust capital and liquidity ratios. 

While global uncertainty remains elevated, business activity held up across our key segments, with ongoing momentum in CASA, wealth, cards and loans. Leveraging our regional footprint and deep ASEAN connectivity, we stand ready to support our customers as they navigate a more uncertain operating environment.

Looking ahead, we will focus on deepening relationships across our enlarged ASEAN customer base, strengthening ecosystem partnerships and helping our customers capture opportunities for long-term growth.”

Closing Thoughts:

UOB’s 3 reportable business segments (net interest income, net fee and commission income, and other non-interest income) continued to decline year on year, resulting in weaker total income and net profit. This marked the 3rd consecutive quarter in which the Singapore bank’s top- and bottom-line fell.

It’s worth noting that, with UOB’s management targeting a 50% dividend payout ratio, a similar performance in the 2nd quarter compared to the 1st could lead to a lower interim dividend.

That said, there are some positives: first, allowance for credit and other losses fell 30% year on year to S$203 million, down from S$290 million in 1Q FY2025; second, non-performing assets have been trending downward for two consecutive quarters, after peaking at S$5,809 million in 3Q FY2025, declining to S$5,440 million in 4Q FY2025 and further to S$5,276 million in 1Q FY2026.

Results of the Other Singapore-Listed Banks:

DBS Group Holdings Limited (SGX: D05): 1Q FY2026 Business Update Review

Oversea-Chinese Banking Corporation Limited (SGX: O39): 1Q FY2026 Business Update Review

Related Documents:

1Q FY2026 Performance Highlights
1Q FY2026 CEO Slides
1Q FY2026 CFO Slides

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

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