UOB Q2 Net Profit Falls 6% to S$1.34 Billion Amid Lower Interest Income

United Overseas Bank (UOB) reported a 3% decline in net profit to S$2.83 billion (US$2.2 billion) for the first half of 2025, primarily due to pre-emptive general allowances amid macroeconomic uncertainties. The bank's second-quarter net profit fell 6% year-on-year to S$1.34 billion, missing analyst expectations, as net interest income dropped 3% due to lower net interest margins, which declined 14 basis points to 1.91%. Despite this, operating profit rose 3% for the half-year, supported by an 11% increase in net fee income driven by wealth management, loan-related services, and credit cards. Wholesale banking profits fell 12% on lower interest rates and asset competition, while retail banking profit before tax grew 11%, aided by growth in current accounts, savings accounts, wealth, and cards, with retail deposits surpassing S$200 billion. The bank declared an interim dividend of 85 cents per share for the half-year and will pay a second tranche of a 50-cent special dividend to shareholders. UOB remains optimistic about ASEAN's long-term growth prospects despite short-term profit pressures from margin compression and increased credit allowances.