Friday, United Overseas Bank Ltd., or UOB, (UOVEY.PK) reported a sharp decline in profit for the fourth quarter, primarily hurt by higher impairment charges on loans and investment securities.
UOB's fourth-quarter profit after tax declined 34.4% to S$339 million from S$521 million in the comparable quarter last year. The group attributed the decrease in profit to the higher impairment charges on loans and investment securities and lower fee and commission income, partly offset by higher net interest income.
Profit attributable to equity holders of the bank was S$332 million or S$0.81 per share, compared to S$506 million or S$1.31 per share last year.
Profit before tax was S$448 million compared to S$637 million in the prior-year quarter.
Impairment charges rose 197.9% to S$381 million from S$128 million in the year-earlier quarter, largely due to higher impairment charges on loans and investment securities.
Net interest income increased 28.8% to S$957 million from S$743 million in the same quarter a year ago, due to increased loan volume and lower funding costs. On the other hand, non-interest income declined 26.5% to $391 million from S$532 million, largely due to lower fee and commission income from fund management and investment-related activities.
For the full year, profit after tax dropped to S$1.96 billion from S$2.17 billion, a year earlier. Profit attributable to equity holders of the bank was S$1.93 billion or S$1.24 per share, compared to S$2.1 billion or S$1.36 per share last year. Profit before tax was S$2.48 billion compared to S$2.75 billion.
Net interest income amounted to S$3.57 billion compared to S$2.98 billion a year ago. Non-interest income totaled to S$1.67 billion, down from S$1.89 billion in the prior year.
In addition, the directors recommend the payment of a final one-tier tax-exempt dividend of 40 cents per ordinary share for the financial year ended 31 December 2008, compared to 45 cents in the last year.
UOVEY.PK closed Thursday's trading session at $13.15.
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