PETALING JAYA: United Overseas Bank (Malaysia) Bhd (UOB Malaysia) reported a net profit of RM1.22 billion for the financial year ended 2019, relatively flat from the previous year.
Albeit slightly lower, its performance was driven by higher net interest and non-interest income, but partially offset by an increase in operating expenses and allowances for expected credit losses.
The bank’s total operating income increased 3.2% to RM3.10 billion in 2019, contributed by higher interest income from loans and debt instruments at fair value through other comprehensive incomes. The growth in net interest income was partially offset by higher interest expense from net placements of financial institutions. Non-interest income growth was supported by higher trading and investment income. Net income from its Islamic banking business also increased 2.9% to RM42.0 million during the year.
Total allowances for expected credit losses increased 9.9% or RM20.6 million, mainly due to higher expected losses on loans, advances, financing and other financial assets. However, this was partially offset by a write-back in commitments and contingencies.
UOB Malaysia’s cost-to-income ratio increased slightly to 40.9% in 2019 (2018: 39%), while total operating expenses increased 8.6% to RM1.27 billion as the bank continued to invest in its talent and technology infrastructure to support business growth.
Gross loans, advances and financing rose 3.5% to RM86.2 billion and non-bank deposits increased 0.5% to RM89.1 billion in the same period. The bank maintained its sound asset quality by keeping its net non-performing loans ratio low at 1.5% during the year.
UOB Malaysia CEO Wong Kim Choong (pix) said the bank’s performance in 2019 reflected the slower global economic growth amid weaker global manufacturing and trade activities.
“Backed by our strong balance sheet and effective resource management, we navigated the macro headwinds and stayed focused on helping our customers seize opportunities both at home and across Asean by tapping UOB group’s regional expertise. The bank’s performance in 2019 also underscores our robust corporate governance, risk management and business practices,” he said in a statement today.
To help cushion the impact of the pandemic on its customers’ financial well-being, UOB Malaysia has extended to its customers and colleagues a six-month moratorium on all loans, including mortgages and Islamic financing facilities. The bank will also waive compounding interest on loans and mortgages for all eligible individual and SME customers during the six-month moratorium.
