United Overseas Bank Limited

Q2 2026 net profit was $1.5 billion, up 10% year on year, and ROE was 11.8%. H1 2026 net profit was $2.9 billion, up 3% year on year; total income was flat, expenses increased 2%, and allowance for credit losses declined 27%. On the balance sheet, CET ratio was 15.4%, NSFR was 114%, and LCR was 159%; NPL ratio was 1.6%, NPA coverage including collateral was 306%, and credit cost was 28 bps for Q2 and 27 bps for H1. Retail income held steady at $2.6 billion in H1, wealth income rose 16% year on year, invested AUM rose about 15%, net new money flows were $4 billion, wholesale trade loans grew about 33%, and Global Markets customer treasury income reached a first-half high of $584 million. For 2026, management guided to low single-digit loan growth, full-year NIM of about 1.75% to 1.8%, fee income low single-digit growth, operating costs low single-digit increase, and credit cost of 25 to 30 bps.

The CEO emphasized that ASEAN remains UOB’s core advantage and said the bank is well positioned to benefit from trade, investment, and supply-chain shifts into the region. He highlighted a strategy centered on deepening customer relationships, scaling wealth, capturing more ASEAN trade and FDI flows, and repositioning Hong Kong toward more diversified, asset-light growth. His tone was confident but disciplined, repeatedly stressing capital allocation, prudent risk management, and a focus on ROE.

The CFO said the quarter was resilient despite macro uncertainty and pointed to broad-based momentum across customer segments, supported by record wealth fees and transaction banking. He cited Q2 profit of $1.5 billion, H1 profit of $2.9 billion, CET ratio of 15.4%, and credit costs within guidance, while noting margin pressure from lower rates had been cushioned by asset growth and liquidity management. He also detailed the Allianz Global Investors transaction at $535 million, a roughly $330 million gain, and an estimated 14 bps CET uplift when completed; the interim dividend was $0.88 per share and the bank has completed about 40% of its $2 billion share return plan.

Analysts pressed management on why loan growth guidance remained low-single-digit despite healthy Singapore loan data, and CFO said UOB is keeping full-year loan growth guidance at low single digits even though wholesale loans grew about 8% and retail loans about 4%. Questions also focused on why fee income guidance was lowered from high single digits to low single digits; management said some pipeline deals shifted into the second half and credit card fee dynamics weakened due to spending mix changes, lower interchange, higher miles redemption costs, and higher scheme fees. Management also said the Greater China real estate NPA was a China client booked in Hong Kong, that the Allianz sale proceeds will only arrive in 2027, and that AI is already embedded across the bank with more than 30,000 staff using Copilot and over 400,000 prompts per month.