Singapore Stocks: UOB Hits S$6 Billion Profit Milestone; Boosts Dividend
Global Markets

Singapore Stocks: UOB Hits S$6 Billion Profit Milestone; Boosts Dividend

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The Singapore banking giant United Overseas Bank, or UOB, delivered robust profits in 2023 and increased its final dividend payout for the year. However, investors were disappointed by the bank’s reduced loan growth estimate for 2024. 

One of the popular Singapore stocks, United Overseas Bank Ltd. (SG:U11), boosted its final dividend for 2023 and reported a higher net profit for the year, surpassing the S$6 billion milestone. However, the UOB share price was trading down by 2.56% at the time of writing today, as investors were disappointed with the company’s reduced 2024 loan growth estimate. UOB expects low-single-digits loan growth in 2024 compared to the prior outlook of mid-single-digits growth. Year-to-date, UOB stock has been trading up by 3%.

UOB is among the top three banks in Singapore, operating a global network of 500 branches in 19 countries.

More on 2023 Results

In its annual results for 2023, UOB saw its net interest income (NII) rise 16% year-on-year to S$9.7 billion, driven by higher interest rates. Moreover, UOB’s fee income received a significant boost from credit card spending, fuelled by positive consumer sentiment and the expansion of its regional franchise. As a result, its total income surged by 20% year-on-year to S$13.9 billion.

Backed by the robust performance, UOB increased its final dividend to S$0.85 per share from S$0.75 in the previous year. Consequently, the bank’s total dividend for 2023 rose to S$1.70, reflecting a 26% year-on-year increase.

The bank maintained its 2024 guidance for double-digit fee growth and positive growth in total income.

Moving forward, UOB’s CEO, Wee Ee Cheong, expressed optimism about ASEAN’s (Association of Southeast Asian Nations) potential despite the uncertain global economic outlook. He anticipates that the region will experience growth driven by increased domestic demand, a strong resurgence in tourism, and significant investment in the manufacturing sector.

What is the Target Price for UOB?

U11 stock has received a Moderate Buy consensus rating on TipRanks, backed by one Buy and one Hold recommendation from analysts. The average share price target is S$31.84, which shows an upside of 9% from the current level.



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