UOB Kay Hian

	H1 FY24	H1 FY23	Y-O-Y % change
Revenue (S$m)	317.1	287.8	10.2
Net profit (S$m)	113.9	69.3	64.3
EPS (¢ )	12.64	7.83

The fine is for breaches in business conduct and anti-money laundering rules.

The Monetary Authority of Singapore has fined UOB Kay Hian Private Limited $375k for its failure to comply with business conduct requirements under the Securities and Futures (Licensing and Conduct of Business) Regulations (SFR) and anti-money laundering and countering the financing of terrorism (AML/CFT) requirements under MAS Notice SFA04-N02. 

Between September 2012 and June 2018, MAS said UOBKH failed to implement adequate control over its corporate finance business and failed to ensure that its CF business was subject to internal audit.

ALSO READ:    MAS slaps former UOB Kay Hian rep with $100,000 civil fine over false trading

Specifically, UOBKH& rsquo s internal policies failed to sufficiently involve its Compliance function in matters of compliance, thereby compromising its effectiveness. It also failed to meet the standards set out in the applicable Association of Banks in Singapore Listings Due Diligence Guidelines for internal policies and procedures on conducting due diligence for IPOs

Between December 2016 and August 2017, UOBKH also committed breaches of MAS& rsquo AML/CFT requirements, which were a result of material lapses in its control processes.

MAS said that UOBKH failed to verify customers& rsquo source of wealth (SOW) during onboarding, even though they were determined by the firm to be of higher money laundering (ML) risk. UOBKH& rsquo s practice of verifying the SOW of such customers only upon specific trigger events did not comply with AML/CFT requirements for performing enhanced customer due diligence on customers who pose higher ML risk.

UOBKH also accepted third-party receipts that represented a substantial amount of the value of an IPO without conducting adequate due diligence. As a result, UOBKH failed to detect and report suspicious transactions despite red flags of potential nominee arrangements, which may be abused to conceal beneficial ownership and facilitate market misconduct.  

& ldquo UOBKH& rsquo s breaches of AML/CFT requirements exposed it to the risk of being used as a conduit for financial crime. UOBKH has taken remedial measures to enhance its internal policies and controls. In addition, MAS has required UOBKH to appoint an independent external party to validate the implementation and effectiveness of its remediation measures and report the findings to MAS,& rdquo MAS said.

UOBKH has already paid the fine in full.

Revenue for the period comes in 10.2% higher at S$317.1 million

 

UOB Kay Hian : U10 -1.46% reported on Thursday (Aug 15) a net profit of S$113.9 million for the six months ended Jun 30, up 64.3 per cent from S$69.3 million in the previous corresponding period.

 

Revenue increased 10.2 per cent to S$317.1 million compared to S$287.8 million in the year-ago period.

 

On a per-share basis, earnings were 12.64 Singapore cents, up from 7.83 cents.

 

The brokerage firm attributed this to strong equity market performance and higher trading volumes in the US, which sustained improved investor activity for the period.

 

It also noted that there had been &ldquo considerable&rdquo interest in structured products and fixed income instruments as investor sentiment positioned for an expected rate cut in the second half of 2024.

 

Commission and trading income rose 18.8 per cent to S$166 million from S$139.8 million, while other operating income increased to S$27.3 million from S$16 million.

 

This was offset by reduced interest income, down 6.2 per cent to S$132 million, which was a result of lower income from structured loans.

 

While staff costs climbed 28.7 per cent to S$101.1 million, finance costs fell 40 per cent to S$19.1 million.

 

Other operating expenses also dropped 35.1 per cent to S$43.1 million, as other operating expenses for H1 2023 included an additional allowance for impairment of trade receivables of S$17.8 million.

 

The brokerage said it will adopt a cautious outlook for the next six to 12 months, as recent market events showed &ldquo significant volatility and investors&rsquo nervousness towards valuations and direction of US economic policies&rdquo .

 

No dividend was recommended for the half year.

UOB-KAY HIAN HOLDINGS LIMITED

UOB Kay Hian says ' disadvantageous' to reveal details of key management' s remuneration

It cites ' highly competitive human resource environment' as a reason

 

BROKERAGE firm UOB Kay Hian on Friday (Apr 19) said it believes that a detailed disclosure of the remuneration of its key management personnel is " disadvantageous to the business and its shareholders' interests given the " highly competitive human resource environment" it operates in.

 

The company was responding to one of the questions from the Singapore Exchange (SGX) regarding its annual report for the fiscal year ended Dec 31, 2023. UOB Kay Hian was also responding to questions it had received from shareholders ahead of its annual general meeting on Apr 25. 

 

SGX had, in its query to UOB Kay Hian, noted that the company did not disclose any details of its remuneration to the key management personnel for the fiscal year. The bourse operator asked the company to clarify how the disclosure of the aggregate remuneration paid to the top five key management persons would affect the competitiveness of the company, given that these people were not named in the annual report. 

 

SGX had also asked UOB Kay Hian to disclose this information in its response. 

 

In its reply, UOB Kay Hian said it " seeks to promote a collegiate senior team culture focused on collective performance" and wishes to minimise individual comparisons.

 

The total remuneration of the top five key management persons excluding the chief executive officer, the company said, stood at S$6.2 million. 

 

The bourse also queried UOB Kay Hian on its diversity-related disclosures and diversity approach. 

 

The company said in its response that its approach to board diversity seeks to achieve an optimal composition by ensuring that it has sufficient diversity &ndash primarily in terms of complementary skills, core competencies and experience &ndash to benefit the group and enhance its long-term success.

 

The company also said it recognises the value of the other aspects of diversity &ndash such as age and gender &ndash and strives to consider these diversity aspects in reviewing its board composition and succession without compromising the primary considerations.

 

" The board seeks to ensure sufficient diversity at all times as far as practicable and the composition of the current board meets its diversity targets," UOB Kay Hian said. 

 

UOB Kay Hian also amended a portion of its annual report after a query from SGX &ndash specifically the declaration item on whether directors who were seeking re-appointment or re-election were concerned with the management or conduct of the affairs of any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere. 

 

The company had initially put down " no" as a response to that point for both its executive chairman Wee Ee Chao and non-executive and non-independent director Tang Wee Loke.

 

The company, following the query from the bourse, amended the response to " yes" for the two directors, in light of the disciplinary actions taken against the company by the Monetary Authority of Singapore (MAS) and the Singapore Exchange Regulation (SGX RegCo) in 2022.

 

In December 2022, SGX RegCo barred UOB Kay Hian from acting as an issue manager and full sponsor for initial public offering and reverse takeover submissions on the bourse. MAS had earlier on Aug 31, 2022 fined the brokerage firm S$375,000 for business conduct compliance failures. 

 

In response to a query from a shareholder on whether the company has applied to the authorities to lift the ban, it said it was working closely with the regulators on the lifting, and will update shareholders when this has been concluded. 

 

Shareholders also asked UOB Kay Hian if there would be any implications on the company following the death of Wee Cho Yaw, and whether Wee Ee Chao' s new appointment as the chairman of Haw Par Corporation would leave him sufficient time and bandwidth to see to his duties at UOB Kay Hian. 

 

The company said there is no material impact on UOB Kay Hian from the demise of Wee Cho Yaw, and there is also no material impact on the company following the recent appointments of Wee Ee Chao. 

 

A shareholder asked the company about the risks of the structured loan receivables, participation trade payables and debts issued that are related to some referenced assets &ndash which were on the company' s balance sheet. The shareholder wanted to know what the maximum exposure was, as well as the likelihood of losses that would arise from " such complex products" . 

 

UOB Kay Hian said it conducts " proper due diligence" of every borrower, and maintains a conservative loan to value ratio for all such transactions. 

 

" This means that all such financing arrangements will always be sufficiently collateralised. Management regularly reviews the risk profile of the receivables and the balance sheet appropriately reflects the value of the receivables," the company added. 

 

BROKERAGE firm UOB Kay Hian on Wednesday (Feb 28) reported a 92.2 per cent growth to its earnings for the second half ended Dec 31, 2023 on a lift to its commission and trading income, and interest income.

 

For H2 2023, the group&rsquo s net profit grew to S$96.3 million, up from S$50.1 million in the year-ago period. 

 

The brokerage&rsquo s commission and trading income for the period hit S$152.9 million, up 9.6 per cent from S$139.6 million in the year-ago period, while interest income grew 28.7 per cent from S$101.2 million to S$130.2 million.

 

The growth in interest income came about due to the higher interest rate environment, it noted.

 

Overall, the company&rsquo s revenue grew 16.6 per cent to S$303.7 million, up from S$260.5 million a year ago.

 

These results translate to earnings per share of 10.9 Singapore cents, versus 5.93 cents in H2 FY2022.

 

The board thus proposed a first and final dividend of 9.2 Singapore cents per ordinary share for FY2023, to be paid on Jun 26 if shareholders approve of it at the group&rsquo s upcoming annual general meeting to be held on Apr 25.

 

The FY2023 dividend is higher than the dividend of six Singapore cents per ordinary share declared in FY2022.

 

For the full year, revenue increased by 19.3 per cent to S$591.5 million. Its net profit rose by 62.6 per cent to S$165.6 million, up from FY2022&rsquo s S$101.9 million. 

 

This came despite a 3.6 per cent drop in commission and trading income in the year to S$292.7 million, from S$303.7 million. 

 

This is because interest income grew by a wider margin &ndash 67.2 per cent &ndash to S$262.3 million, from S$156.8 million in FY2022.

 

This is also a result of higher interest rates, the company said.

 

Commission expenses, meanwhile, dipped 11.4 per cent to S$71.8 million, while staff costs increased 19 per cent to S$175 million.

 

The group said that this is because a higher proportion of commission income was generated by structured products. 

 

That said, finance expenses grew 33.2 per cent in the year to S$52.5 million.

 

Assessing its performance for FY2023, the group said that its core markets in East Asia recorded a drop in volumes, as demand slowed amid global tightening of monetary policy to fight inflation.

 

However, it was able to mitigate the impact with increased trading in the US markets, it added.

 

Giving its outlook for FY2024, the group said that it foresees interest rates to come down.

 

This &ldquo would likely improve liquidity and encourage more activity in the capital markets&rdquo , it pointed out.