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UOB shares end 2.8% down after Q3 profit tumbles
The lender &lsquo pre-emptively set aside&rsquo additional allowances
[SINGAPORE] Shares of UOB : U11 -2.78% plunged as much as about 4.6 per cent on Thursday (Nov 6) after it reported a 72 per cent year-on-year decline in net profit for its third quarter.
The counter fell to S$33.25 two minutes after market open on a S$1.62 drop that momentarily slashed UOB&rsquo s market value by nearly S$2.7 billion.
It later pared some of the losses to be 3.2 per cent down as at the midday trading break.
The bank&rsquo s Q3 net profit fell to S$443 million, compared with S$1.61 billion a year earlier, reported UOB. The result was far from the S$1.34 billion consensus estimate according to a Bloomberg poll of five analysts.
The lender &ldquo pre-emptively set aside&rdquo additional allowances worth S$615 million in Q3, bringing the total allowance for credit and other losses to S$1.36 billion as at Sep 30. This compared to S$304 million a year earlier.
Citi analyst Yong Hong Tan said pre-provision operating profit was about S$1.9 billion &ndash a much milder 3 per cent quarter-on-quarter dip and 4 per cent below his estimates.
The weak Q3 headline profit was mainly due to one-off &ldquo kitchen-sinking&rdquo provisions rather than underlying weakness. Core operating performance held up relatively well, with stable margins and costs, said Tan.
He added that asset quality worsened slightly, mainly outside Singapore, but UOB&rsquo s stronger loan-loss buffers suggest a more conservative stance ahead.
Despite UOB&rsquo s cheaper valuation versus peers, Tan said near-term sentiment is likely to stay cautious. Investors will likely remain focused on asset quality given the rise in non-performing loans and higher specific provisions, even after this &ldquo kitchen-sinking&rdquo quarter.
Tan added that the bank&rsquo s FY2026 guidance also implies lower earnings and dividend growth, which could continue to weigh on share performance despite its strengthened balance sheet.
UOB&rsquo s S$885 million allowance build-up &lsquo prudent&rsquo despite Q3 profit hit: analysts
In general, analysts do not read the provisioning as a red flag for the bank
[SINGAPORE] UOB&rsquo s S$885 million move to shore up its allowances is a &ldquo prudent&rdquo step that brings its provision ratios in line with those of DBS and OCBC, analysts said, even as it resulted in a huge one-off hit to the lender&rsquo s third-quarter profit.
On Thursday (Nov 6), UOB : S68 -0.12% shocked the market with a 72 per cent drop in net profit to S$443 million for the three months ended Sep 30, from S$1.61 billion a year earlier.
This came after the bank set aside total allowances of S$1.17 billion &ndash more than four times or S$885 million higher than the S$281 million booked the year before.
As the counter fell 2.8 per cent to close at S$33.90, paring back from a larger decline of over 4 per cent earlier in the day, analysts took the provisions in their stride. In general, they did not read the provisioning as a red flag for UOB.
The S$1.17 billion comprised general allowances of S$687 million and specific allowances on loans of S$479 million, the latter up from S$296 million previously.
DBS Group Research analyst Lim Rui Wen said the general allowances came as UOB &ldquo (seeks) to increase buffers to be more in line with peers&rdquo .
General allowances are broad provisions set aside for potential credit losses in the overall loan portfolio, while specific allowances are made for identified troubled loans.
&ldquo I think it&rsquo s fair to say that we believe the move is partly to catch up with provisions that peers have made earlier,&rdquo said Lorraine Tan, director of equity research for Asia at Morningstar, adding that it is &ldquo probably not representative of any specific new deterioration&rdquo .
&ldquo They do appear to be bowing to investor expectations of growing risks, but at the same time, we think the caution is warranted in light of slowing global growth,&rdquo she added.
The increase brings UOB&rsquo s performing loans coverage &ndash a measure of how much buffer the bank holds against potential losses from loans that are still current &ndash to 1 per cent as at Sep 30, up from 0.8 per cent at end-June.
In comparison, UOB&rsquo s peers have a general allowance coverage of about 0.9 per cent, Tan noted.
Tay Wee Kuang, research analyst at CGS International Securities Singapore, said the additional provisioning exercise was &ldquo mostly out of prudence&rdquo .
The boost to general allowances will allow for migration to specific allowances if &ldquo systemic headwinds within its commercial real estate loan book arises&rdquo , he said.
UOB deputy chairman and chief executive officer Wee Ee Cheong and group chief financial officer Leong Yung Chee said at an earnings briefing on Thursday that most of the specific allowances were tied to exposures in the commercial real estate sectors of the US and Greater China.
Tay said lifting its performing loans coverage ratio to 1 per cent also allows UOB to &ldquo commit&rdquo to its 2026 guidance, which includes total credit costs coming in between 25 and 30 basis points.
UOB and DBS : D05 +3.81% both released their Q3 results on Thursday. OCBC is set to announce its results on Friday morning, before market trading.
At DBS&rsquo earnings call, CEO Tan Su Shan described the bank&rsquo s general allowance reserves as &ldquo more than adequate&rdquo .
As at Sep 30, DBS&rsquo total allowance stood at S$6.4 billion, comprising S$4.1 billion in general allowances and S$2.4 billion in specific allowances.
No $3 no buy.
MrBear12 ( Date: 06-Nov-2025 16:57) Posted:
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Lesser profits and money earmarked for provisions means lesser shareholder return.
So yes, it could well go under 33.
Even under 30 is possible
So yes, it could well go under 33.
Even under 30 is possible
Fiat500 ( Date: 06-Nov-2025 16:50) Posted:
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Profits are still there for UOB, its just that they're setting money aside for rainy days..But as usual, mkt don't react well to such news..
Mark001 ( Date: 06-Nov-2025 12:32) Posted:
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Wait and see.
Could it drop to 33?
Could it drop to 33?
MrBear12 ( Date: 06-Nov-2025 09:58) Posted:
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Pray for change
Yes worst .... up slow slow down fast fast
Among the 3, UOB is the worst now!
mav1ryan ( Date: 06-Nov-2025 09:09) Posted:
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They are plunging... too much provision for bad debts... or simply they know their bad debts are mounting.
Fiat500 ( Date: 06-Nov-2025 08:33) Posted:
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UOB is gonna plunge today with this result... (
UOB&rsquo s 3Q25 operating profit at S$1.9 billion, with continued franchise growth Steady progress in delivering our strategic priorities across business segments
UOB Group (UOB) posted S$1.9 billion in operating profit for the third quarter of 2025 (3Q25), reflecting sustained franchise growth.
Both Group Retail and Group Wholesale Banking segments demonstrated progress towards strategic priorities, notably in wealth AUM, card billings, investment banking, quality loan growth and CASA acquisition. Global Markets also delivered strong performance, leveraging client demand for hedging and investment solutions while capturing market opportunities.
Net interest income moderated by 3% quarter on quarter (QoQ) as loan growth of 2% helped to offset margin pressures from lower benchmark rates. Fee income rose 8% QoQ, driven by broad-based growth across wealth, cards and loan-related activities. Customerrelated treasury income reached a new high.
Net profit for 3Q25 stood at S$443 million, as the Group took proactive steps to shore up pre-emptive general allowances to strengthen its provision coverage amid ongoing macroeconomic uncertainties and sector-specific headwinds. This brought performing loan coverage to 1%, NPA coverage to 100% and 240% including collateral. Total credit costs are expected to normalise following this exercise. The final dividend payment for 2025 will not be impacted by this pre-emptive general allowance set aside.
UOB Group (UOB) posted S$1.9 billion in operating profit for the third quarter of 2025 (3Q25), reflecting sustained franchise growth.
Both Group Retail and Group Wholesale Banking segments demonstrated progress towards strategic priorities, notably in wealth AUM, card billings, investment banking, quality loan growth and CASA acquisition. Global Markets also delivered strong performance, leveraging client demand for hedging and investment solutions while capturing market opportunities.
Net interest income moderated by 3% quarter on quarter (QoQ) as loan growth of 2% helped to offset margin pressures from lower benchmark rates. Fee income rose 8% QoQ, driven by broad-based growth across wealth, cards and loan-related activities. Customerrelated treasury income reached a new high.
Net profit for 3Q25 stood at S$443 million, as the Group took proactive steps to shore up pre-emptive general allowances to strengthen its provision coverage amid ongoing macroeconomic uncertainties and sector-specific headwinds. This brought performing loan coverage to 1%, NPA coverage to 100% and 240% including collateral. Total credit costs are expected to normalise following this exercise. The final dividend payment for 2025 will not be impacted by this pre-emptive general allowance set aside.
UOB results still not released till now...Probably not so good results afterall.. )
Keep dropping tomorrow.
Regional banks, Jefferies shares tank as concerns about sour loans grow on Wall Street
Published Thu, Oct 16 20251:40 PM EDTUpdated Thu, Oct 16 20254:11 PM EDT
https://www.cnbc.com/2025/10/16/regional-banks-and-jefferies-shares-tank-as-concerns-grow-on-wall-street-about-sour-loans.html
https://www.cnbc.com/2025/10/16/regional-banks-and-jefferies-shares-tank-as-concerns-grow-on-wall-street-about-sour-loans.html
Why Jamie Dimon is warning of &lsquo cockroaches&rsquo in the US economy
Many Americans shrugged off the implosion of a pair of overleveraged Bear Stearns hedge funds in 2007. Stocks were at record highs, after all. But later it became apparent that those bankruptcies were among the first shoes to drop in an epic financial meltdown that would impact virtually all Americans.
Wall Street CEO Jamie Dimon rescued Bear Stearns when it nearly collapsed in 2008. Today, he cautions that trouble could be lurking again beneath the red-hot markets.
First, a subprime auto lender and dealer went bust last month in a crash fueled by plenty of risky loans and, allegedly, &ldquo pervasive fraud&rdquo of &ldquo extraordinary proportion,&rdquo a lawyer said in court.
Then First Brands, an auto-parts supplier built on complex and hidden loans, blinded Wall Street with a bankruptcy that financial firms are highly exposed to.
https://edition.cnn.com/2025/10/16/business/jamie-dimon-us-economy-cockroaches
Both Uob n Ocbc are more like brothers now..Both seems to be stuck there forever whereas their big brother has gone through the roof!
happykaki ( Date: 07-Oct-2025 15:22) Posted:
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UOB is not moving ......slow
Seem like no one buying uob? It is okay to enter $35.43?
$1.3 billion. Is it going to drag the share price down?