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UOB, OCBC Profits Jump; Restore Dividend Payouts at Pre-Pandemic Levels
August 4, 2021
OCBC and UOB reported a jump in profits, restoring their dividend payout to pre-pandemic levels with the increased payout by both banks coming after the MAS lifted dividend caps for Singapore based banks last month.
OCBC reported a solid jump in Q2 net profits by 59% to S$1.16bn ($860mn). Profits were helped by a drop in credit allowances by 69% YoY to S$232mn ($172mn) while both net interest income and non-interest income slowed 2% and 3% to S$1.46bn ($1.08bn) and S$1.11bn ($0.82bn) respectively. OCBC also saw its Wealth Management income hit a record in the half-year and its Private Banking AUM rose 11% to $125bn in H1. Its NPL ratio was flat at 1.5% QoQ. OCBC declared a dividend of 25 cents a share, equal to a dividend payout ratio (DPR) of 42%, moving towards pre-pandemic levels of 47%. The bank’s CET1 ratio stood at 16.1%, up 60bp QoQ.
OCBC’s bonds were stable – its 3% Perp was at 103.8, yielding 2.5%
UOB reported a rise in Q2 net profits by 43% YoY to S$1bn ($0.74bn). Like OCBC, profits were helped by a drop in credit allowances by 54% to S$182mn ($134.9mn). Also, its net interest income increased 8% to S$1.58bn ($1.17bn) fueled by strong loan growth of 6% and non-interest income growth of 34% to S$595mn ($441mn). Its NPL ratio was flat at 1.5% QoQ. The bank’s NIM also rose 8bp to 1.56%. UOB declared an interim dividend of 60 cents a share, equal to a DPR of 50%. UOB’s CET1 ratio stood at 14.2%, down 10bp QoQ.
UOB’s bonds were flat – its SGD 2.55% Perp was at 99.78, yielding 2.44%
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