# United Overseas Bank Limited — 3Q 2025 Financial Results Media Briefing

- Event: 3Q 2025 Financial Results Media Briefing
- Date: 6 November 2025
- Kind: automated speech recognition (ASR) transcript, unverified, no speaker labels
- Source webcast: https://www.youtube.com/watch?v=8rPjBVkSdBI
- Duration: 47:05 (~5,328 words)
- Presenters (per UOB's announcement, not per-turn): Wee Ee Cheong (Deputy Chairman & CEO) and Leong Yung Chee (Group CFO)

Unofficial machine transcript. Prepared by SMID Research from the issuer's public results webcast recording by automated speech recognition, without a full manual check: expect mis-heard names and figures. No speaker labels are given; timestamps refer to the recording. Not a company publication. UOB's results webcast is the authoritative record. Copyright in the briefing rests with United Overseas Bank Limited; contact contact@smidresearch.com for corrections or removal.

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[0:00] Welcome to our session. I would like to invite the CEO to get us going. Good morning. Thank you again for joining us today. As all of you know, geopolitical developments are impacting business outlook. But we always see encouraging signs.

[0:46] Our same continues to attract investments. I mean, evolving changes. We continue to see healthy intra-regional trade flows. While a softening rate environment is putting pressure on asset use, we see healthy loan growth and fee in town. Now, for the first, for the third quarter we have reported a strong operating profit of 1.9 billion. And we are happy with our performance for the first 9 months with healthy growth in loans, deposits, including CASA, wealth AUM, and fees.

[1:32] Now, from this position of strength, we have proactively set aside additional preemptive general allowances. This substantially strengthens our provision coverage ratios. Reinforcing resilience and flexibility to navigate hit wins and sustain long-term growth. And after building our coverage ratios, we retain a healthy capital position. By prioritizing balance sheet strength, we stand ready to act, support customers,

[2:17] and see strategic growth opportunities across the region. Now, for our shareholders, we remain committed to our 2 billion share buyback with almost one quarter of the program completed as of September, 2025. There is no change to a policy of 50% dividend payout, and our 2025 final dividend will not let me emphasize will not be impacted by this preemptive general allowance. Our core franchise performance remains sound with strong fundamentals and positive momentum

[3:04] quarter on quarter. If we look at the long growth, it was robust. 2% quarter on quarter, 5% year on year. And they are very broad-based. CASA, this is a very broad-based program. CASA, this is something that we have been always emphasizing for both retail and wholesale banking registered healthy growth. For the first nine months, up 19% year on year. Our well-management AUM grew strongly during the quarter. Quarter on quarter AUM up 8 billion, or 4% new money. And the invested AUM

[3:53] portion continued its upward trend. In terms of P&L, net interest income down 3% quarter on quarter. It was impacted by margin compression in a declining rate environment. But this was partially offset by healthy loan growth. Gross fee income saw robust crop-based growth across loan-related parts and well-management businesses. Up 8% quarter on quarter, 10% year on year. Customer-related trade and investment income grew strongly. We maintain cost

[4:38] discipline, keep expenses flat while investing in growth initiative. On the asset quality front, MPA formation and specific allowances will hire this quarter due to a few accounts in the US and greater China commercial real estate sectors. We conducted a thorough review of our portfolio. As a proactive move to further strengthen our balance sheets, we took the opportunity to ramp up our provision buffers to cushion against any further hit-bits. By setting aside general allowance of 0.6 billion and raising our GP to performance ratio to 1%

[5:24] which is higher than the 0.9% objective that we articulated previously. With this, our total MPA coverage improved to 100% or 240% including collectors. Now following this exercise, we expect our total credit cost to normalize. With asset quality risks contain barring any unexpected global volatility. Our balance sheet remains strong with CET1 ratio of 14.6% and robust liquidity ratios.

[6:10] We are very confident of delivering sustainable value for the long term. Looking ahead, while no market is spared from external shocks, we believe ASEAN offers strong structural growth opportunities and we are well positioned to capture them. We are staying focused on growing our franchise and supporting businesses through our connectivity strategy. We are deepening relationships with our expanded retail base through wealth and lifestyle offerings. Investing in innovations to uplift productivity. We are confident of executing our strategy

[6:56] and achieving sustainable growth as we invest for the future. We are in a strong position moving into next year with the following guidance. Low single digit loan growth, two year name of 1.75% to 1.8%. High single digit fee growth driven by growth engine in wealth, cuts, and trade. Low single digit operating costs through total credit costs of 25 to 30 basis points. Now I will hand over to Yung-Chi to share more. Thank you.

[7:42] Thank you CEO. Good morning everyone. I'll take you through the financials. I will have 17 slides to walk through but I'll spend a little bit more time on the summary slide and the highlights and then I'll move a little bit faster through the rest of the slides. On the first slide we walk you through the highlights and as CEO mentioned earlier to you, the macro picture today still has certain pockets of economic and suffering. The benchmark rates have come lower. Asset yields continue to come under pressure but despite that our businesses have continued to deliver on the strategies

[8:28] that they have articulated. Whether it be it in the balance sheet, assets and deposits, loans and deposits rather, if you look at the number of customers, our fee income, our trading income, our welfare UM, our card fees, everything in those parameters have exhibited positive growth. From that position of strength our operating profit has proved resilient by generating 1.9 billion dollars. At the same time our liquidity, capital and funding ratios have continued to stay strong and resilient. We have taken the opportunity in this backdrop

[9:14] to take the preemptive provision and bring our performing loans coverage to 1%. Overall, the NPL ratio remains flat at 1.6%. I've mentioned that the coverage ratio has increased to 100% and including collateral, that's 240%. As CEO mentioned, the final dividend payout will not be impacted by this preemptive general allowance that we have decided to set aside. Now let me walk you through the third quarter's performance.

[9:59] On this page specifically, I've mentioned the 1.9 billion we focus on the fourth column. Offering profit of 1.9 billion is a drop of 3%. Quarter on quarter, it incidentally is also a 3% comparison year on year and this is primarily driven because of the net interest rate environment. Our core fee drivers have continued to register resilient growth. Non-interest income has also risen 5% backed by record high customer flows and treasury income. Expenses have remained stable. Allowance,

[10:45] I've mentioned earlier on, we will discuss more in terms of this allowances in a slide later on. I'll now bring you to the segmental performances first focusing on the retail business. Retail businesses profit before tax overall are stable at 1.5 billion. It exhibited strong growth in our CASA and wealth businesses and income pressures were mitigated with strength in terms of our balance sheet growth in deposits and loans. If you notice, we mentioned earlier on that if you look at the CASA line, we've actually grown 19%

[11:31] year on year. In terms of our AUM growth, we have also taken 8% up year on year with the invested portion from 37% of AUM a year ago. Now it's 41%. Net new money flows at 5 billion for the quarter and I'll cut buildings through 8% year on year. asset quality remains strong with credit cost significantly lower than last year in this portfolio. Operational credit which we talked about in Thailand last year has eased.

[12:19] Our next move to the Hosea banking portfolio. Likewise it has demonstrated broad based growth in terms of loans and deposits growing 6% and 4% respectively and in the loans portfolio our trade loans in particular grew 22%. Again, this demands the strategy that our Hosea banking team was focusing on and if you look at the CASA as a proportion of our deposit business deposits grew 4% the CASA portion is now at 57%.

[13:06] Investment banking has maintained strong momentum without fees reaching record levels on a year to year basis that has grown 29%. This diversified strategy has seen our income contribution from non-real estate sectors stay at 69% with cross-border components of this contribution at 27%. Our regional footprint continues to deliver as we diversify our income streams. The allowances has increased. This is primarily due to collateral markdowns for some non-systemic borrowers

[13:51] and preemptive provisions we have decided to provide to be set aside. Our next talk about our global markets business it has grown 22% year on year and for this particular quarter is our second highest performance on record. This was driven primarily from continued client demands for hedging and investment solutions. The non-customer part of the income has also benefited because of a favorable cost of funds environment where our teams have managed to capture market opportunities across equities

[14:36] foreign exchange and rates contributing to the overall performance. Next I'll talk briefly about net interest income and margins. In my summary slide I did mention that the net interest income moderated 3% quarter on quarter. This was mitigated by asset growth. If you look at the bottom box we grew assets from 479 to 494 billion on a billion on a quarterly basis but on a 9 month basis it was 473 to 491 billion.

[15:23] The net interest margin did compress during this quarter by about 9 basis points compared to last quarter so if you recall we had 1.91 in terms of our Q2 NIMM. For Q3 it is 1.82. But what is important to note is the exit NIMMs. So when we exited 2Q it was 1.84. Our exit for this quarter is 1.82. So in terms of the steepness of the decline in NIMMs resulting from rates movement you would have seen that this has significantly slowed in terms of decline.

[16:09] We do expect further pressures because there are further expected rate cuts one more we believe for this year and two more next year but the downward trajectory I think has slowed significantly. In this quarter the 25 basis points dropped in asset re-pricing primarily came from SING dollar which accounted for about 60 basis points and from high board there was a positive 14 but there is some delays in re-pricing the high board re-rounds which we expect to show up in the fourth quarter.

[16:55] We have proactively managed our funding cost and that has mitigated the drop in NIMM so that accounted for that green box of 16 basis points. I'll speak briefly around fee income next. This slide shows gross fee income. So if you look at gross fee income across all spectrums overall it grew 10% but each of the components showed almost double digit single, high single digits or low double digit gross over this period of time. These fee drivers

[17:42] demonstrate the resilient growth led by activities such as wealth particularly in unit trust and structured products on the back of improved market sentiment and consumer optimism. Card fees also sustained as low momentum. However, on card fees on a net basis we took a harmonization of our rewards scheme in Thailand post the Citi integration. This was taken in 3Q effective 1st of October which means that this normalization would be normalized into 4Q and 2026. A little bit more background on that.

[18:30] Gula I noticed that you were raising eyebrows on that. So when we had the rewards program when we integrated the Citi franchise the rewards redemption ratios were at different levels. Citi's ratios were a little richer than ours. We brought that in line although that still puts us still competitively a head of market in Thailand. So that rationalization was effective 1st of October. The next page on expenses period to period our expenses have actually come off but on the cost to income ratio it has ticked up from 44.3 to 45.2 simply because

[19:16] income numbers have come down. Not because expenses have gone up. We continue to keep very tight cost management while continuing to invest in talent technology and innovation to drive our franchise expansion, meet regulatory requirements and provide services for our customers. The next page on non-performing assets. NPL ratio is unchanged at 1.6%. There was some new NPA formation this quarter I mentioned earlier to non-systemic accounts in selected markets. With the higher write-offs and recoveries, we have maintained proactive in reviewing and monitoring our credit portfolio for asset quality

[20:02] risk. Next page the 0.6 billion that CEO mentioned earlier on. More specifically it's $615 million. This is a pre-emptive general provision. We did so because in the midst of reviewing our portfolio with the macroeconomic uncertainties and some sector specific hit wins that we see, we wanted to build a stronger buffer for potential valuation adjustments going forward. We do so today because our capital, liquidity and funding ratios are in a position of strength. By doing this, we have brought our general provisions coverage from 0.8% to

[20:49] 1%. We brought our NPA coverage from 88% to 100% and from the unsecured NPA coverage numbers from 209% to 240%. The next page speaks briefly to the credit costs. The 32 basis points total credit costs from second quarter comes up to 134 basis points because of the pre-emptive allowances that we have put in place. We do expect with this buffer our credit cost levels will normalise

[21:36] from the fourth quarter and into 2026. Next page, provisions coverage. I mentioned this briefly earlier on. The key numbers would be the general allowance on loans, 1%, the NPA coverage, 100%, unsecured NPA coverage, 240%. Next page on the loan momentum in our balance sheet. It grew 5% near and near, 2% quarter on quarter. This was quite broad based across geographies as well as industries. I mentioned earlier on in particular within our loans.

[22:22] Our trade loans continued to show the fastest growth, exhibiting 22% growth. Next page, a little information on our funding situation. If you look at our LCR, our NSFR ratios, if you look at our CASA to deposit ratios, these continue to demonstrate that our funding positions, liquidity positions, remain healthy and comfortably above minimum regulatory requirements. Last but not least, some information on our capital position at 14.6%,

[23:08] fully loaded at 14.5%, our capital position remains strong. Questions around our share buyback, I think we've addressed earlier on. The two billion share buyback we remain fully committed. As of September, we've executed 24% of that and this is way ahead of the trajectory if you do simply a straight line from now to 2027. Our payout ratio of 50% remains a commitment we make to shareholders and I will emphasize again that the dividend payout for 2025 will not be impacted by our decision to set aside this preemptive general allowance. With that, I conclude my presentation and we can take

[23:53] questions. Thank you CFO. We'll now take questions from media. Any questions? The questions will be on the allowances. General allowances, you mentioned there were sector-specific and you mentioned what some of the sectors are and for the specific provisions can go a bit deeper into a greater China, United States commercial rest state clients that you mentioned. The NPA formation and SP charges arose specifically from US and greater China

[24:38] CRE. Now this actually of the total loan portfolio is a relatively small proportion but we still see continued headwinds in these two markets. However, in the additional allowances also factors in something I mentioned to Guler before we started the call, which is by recognizing some of these recoveries that we are doing actually is accelerated some of the markdowns in the collateral. Now these flows can be chunky and it's very hard to predict in terms of a trajectory but by building this GP position it allows us more room to cope with any sort of asset quality

[25:24] gyrations. And also we see a U-shaped cover as I mentioned these are all secured by setting up a preemptive provision that will give us time to recover and also from the customer's standpoint we also work along with the customer. As a commercial bank I think our primary job is to make sure that we are in a position to protect the interest of the customer. That is important.

[26:11] Otherwise it's very easy just to get rid of it. So the general provision will give us the strength and also you look at the coverage is secured on the unsecured basis is 240%. So we have time. But the earnings continue to be strong and robust. And we are not using that to penalize our shareholders too. But so all this the shareholders will still get the free anti general allowance dividend. In Hong Kong we do see selective interest coming back. Although it's not broad based. So residential for example I think is fairly stable but commercial real estate continues to be soft.

[26:56] So you look at the IPO market in Hong Kong let's go three times like 25 billion. So there's still plenty of liquidity in the system. The question now is at what point? So forget about the view we just set aside first. I think Bloomberg has a question. You said that you expect credit costs to normalize after this. Does that mean you think the worst is over or could there be more provisions ahead based on your huge shape? If I know everything I will not be a banker. I will just go to a casino and bank. But at the end of the day I think if I have to

[27:44] take a calculated view for the two markets we are operating in I would say I would say the worst is a huge shape kind of thing right? So we are dealing with cash flow, we are dealing with assets so there's many factors to talk about when you talk about recovery. But what is more important is we manage our balance shift first. That is the right way. So we can overcome if assuming we misjudge the situation. We are strong enough to take the hit with that this is important. This is why we are talking about pre-emptive. Maybe if I could add to that

[28:30] if you look at the Hong Kong context the loan to value of portfolio is 44%. 44% With this buffer actually we are bringing our credit costs back in line with our guidance of 25-30 not just for this year but also for 2026. So Q4 and 2026 credit costs will be within the 25-30 basis points now. Big caveat here is the global market as much as we can see in 2026 this is what we expect with the normal caveats of borrowing any big market unforeseen volatility. I think that's that we need

[29:18] Yeah, so also a follow up question on the question. Do you expect this to be something one or something that investor can expect in the future? Is there another provision for large up some? Yes, one no. Sorry, just to change subject a little bit. You said the high bore rebound wasn't affected in the impact recue meaning that it should be better because the rebound actually happened around mid-August. So some of those effects may have come through, but

[30:04] we don't think all of that re-pricing has actually been reflected into our pre-Q numbers. There is a lag effect in terms of the re-pricing of the portfolio. It should support the NIMM into 4Q 25. Back to Bloomba. Just looking at the unique positioning here that UOB has because BBS and other Singapore banks haven't made similar provisions necessarily. What are you seeing in commercial real estate today that they're not? I think the risk appetite as well as geographical focus of the three Singapore banks are different. I cannot comment

[30:51] on the areas of business. I think in the areas that we focused on, I think we have seen some upticks in the CRE portfolio within our books. But these are assets that we have already identified and flagged earlier on. And these are not new exposures. So we have not actually put on new exposures in real estate in these markets. We have continued to grow our balance sheet in these markets, but not in these sectors. So I'll come back to the point again which I mentioned to Pula earlier, which is some of these is because of recoveries that we are executing right now. When you do the recoveries, you end up marking the polylytrons down.

[31:37] So this is the reason why you see an uptick. The recoveries are with the CRE from Borneo. So those have to be marked down because of the situation. And those recoveries were they in Hong Kong and the US as well? It's a mix of Hong Kong. So the troublesome area is Hong Kong and the US. I would say greater China. Can I just ask a question about excess liquidity, whether you will deploy in HQLA if you do, what currencies would they be Singapore, SJS Singapore government securities,

[32:22] or would it be a horror US Treasuries or the US? I think over the last couple of quarters with the pressures from NIM, I think you have seen that the logical thing to deploy some of the excess liquidity is actually to make sure you focus on a bit more of your NII as opposed to keep defending where the NIM would be. Those excess capital would naturally be deployed to NSFR friendly instruments. Which are? It would be a combination. A combination of currencies. Is it you don't,

[33:08] do you reveal the currencies? We don't reveal the report of the currency. I think it's not simply just bucketing into one or two types of currencies. I think we've got to look at the profile of our asset liability mix and we've got to be quite nimble in shifting pockets. Including the region because you are in the region. Yes. Sorry, I just wanted to clarify the $615 billion general allowance. Is this the largest single provision you've set

[33:53] buffer that you've set aside in one quarter? We did have one I think period. But I think there was a smaller amount I recall. The position buffer is largely for US and and the community. I think primarily, we have again general allowance is actually set aside for us to have that flexibility to deal with market volatility and challenges. So I think while there are pockets in other markets the primary areas

[34:40] or focus actually would be in those two markets. So there's this interest rate cycle in the US to which Hong Kong is related even though high-born has to be mounted. And the risk-free rate affects all these assets. So as the interest rate comes down and these assets rebound would there be any, would you look at writing back or if this is one? We would look at it. Some of this could be arriving. Yes. This is why we say it's a preemptive. This is not total loss. Right. Pre-emptive.

[35:32] And this was for the third quarter. So this was based on before the latest interest rate come. You use the valuations of before the interest rate come. Well, it was about a week and a half ago. You're talking about US rate cuts. We are down to the flow. US rate cuts was, there was one cut about a week and a half ago and there's another one we expect for 4Q and two more that we expect for 2026. So again, this is preemptive. If you anticipate the rate is cutting. So hopefully, in fact, most of our investors they are buying equity now. They are more pro to buying equity because the

[36:17] interest rate, everything is down. The bond is down. So hopefully, all these will translate to great restaevoir. Another question. There's a question on expenses. I think nine month expenses are lower on tech-tech cost management. I can explain sort of what this tech-tech cost management means. Are you going to cut back on certain spending? I don't like marketing or things like that. And then I guess also, I would look for hiring in the year ahead. Are you expecting to maintain the same level of income? Just because of the budget proportions as we mentioned earlier. So the expenses that come off, it's a combination of various things that we are doing. I think you're right.

[37:03] We did really look at all the various expense buckets within the bank to see other excesses that we can further trim down. And some of it is also sales related expenses. So the fact that income comes down, sales comes down, you actually can trim some of the sales related expenses. Aside from that, I think your other question was in terms of hit count and so on. Our hit count posture remains stable. But what we have done is to actually focus on reinvesting some of the savings, cost savings, into productivity tools. So some of the investments have been in newer areas like Gen AI productivity tools that we are rolling out so that we can augment the productivity of our

[37:49] staff without actually tuning hit count from that perspective. There is also a couple of things you need to keep in mind. Technology obsolescence and compliance costs continue to weigh a relief on us. So these are areas that we cannot compromise. Technology obsolescence presents risks not just to us but our service to customers. Compliance especially in the scheme of things now with heightened scams, frauds, and so on. AML KYC matters. I think these are areas that we absolutely cannot compromise. So what we have saved we've actually reinvested and although we've marginally managed to brought the cost down, it still

[38:35] feels a little elevated in terms of a cost to income ratio perspective. You just have one question. So in terms of overlays you say you have about one contact and this would add a little bit. This would add something to it. Now one of the peers that has a lot of overlays has actually said that they could consider releasing some if the earnings become very volatile. But you're adding to it now. So I'm just trying to in my own mind. I think it's difficult to be clairvoyant about what we face the year ahead. I think

[39:20] if you look at where we are in terms of trade policies, your political tensions, and so on, this situation continues to have pockets where we can't see that clearly. Putting these in place allows us that flexibility to navigate, but doesn't mean that we will use it. And if we don't use it, it could be reversed. But putting that in place gives us confidence and also be in a posture where if our customers require us to support them in their growth areas, we are in a position to do so. If any of the media online have questions, please use the wayside function and we'll call on you. But we can

[40:07] continue with those in the room as well. So in terms of the region, are there any credit costs anywhere in the region that you see coming up? Or is the region looking because they've all interest rates, right? Even Indonesia? I would say quite stable. I would say island a bit of a headwind, but I think generally it's okay. You know, overall scheme of things. And if you can see the growth without the currency transfer. The currency is still growing. And our exposures to the consumer markets in the region

[40:53] is more focused on our higher customer segments. Whereas in Singapore it's broader based. To the consumer, the retail bank and the consumer banking, is that more stable versus because all the issues are in the wholesale side. That more stable than the corporate side. Is the retail banking more stable than the corporate banking at the market? Retail will be more reflection of the overall economy. Because it cuts across general population. The wholesale will be a little bit more chunky in nature. So I would say yes, in terms of diversification,

[41:39] retail will definitely you know, the segment that you're in is important. This is where employment situation and economy become very important. If you look at the Citibank portfolio when we acquired, they are generally unsecured. But they are very focused on the segment that they want to focus on. If you have a round here, we are the largest card issuer for Visa and MasterCard in the region. The gate and the half-minute customers we have, look at the gross card buildings. They are truly percent year-on-year. So in terms of customer spending and confidence in that franchise, I think it shows.

[42:24] Now there are obviously a spread. It's roughly half in Singapore, half roughly, half in Singapore, half in the region. But it gives you a good sense that this diversified customer base across the region provides a level of stability for our retail franchise. The wholesale is a lot more susceptible, I think, to asset pricing pressures. That, particularly in this environment, everyone is chasing higher quality companies. So there is intense competition in that space. We have a question from Timothy from Straits Times who is online. Because his connection is bad, I'll just read out the question.

[43:10] Do the additional provisions cover SMEs or large corporations? Across our portfolio. Okay. Any other questions? Chili provision is a very positive and it's quite a goal. So you're saying that you're buying insurance, right? Oh, okay. We as an organisation, I think, taking a long-term view, you don't just focus on P&L. It's very easy to focus on P&L.

[43:57] Today, if you forget about the preemptive provision, then the number looks everything okay. But we are taking a view here to make sure that our balance shift is continue to be strong. So that we are in the position. It's no different than during the COVID, we set aside 3 billion to help our customers. That will give the market confidence. And then we give ourself time to react, to recover. So if you had not set aside the 615 million, what would your net profit figure have been? Yeah, it would be a process.

[44:43] Could it be a call for a normalised? Around a billion. Minor adjustments for PEX and other things, but they're on a bit. But that would have still been down to quite a bit year on year. That's right. That's true. This is one word. Can you, I mean, any chance you can give us any specific names or characterise the borrowers? Are these developers, office building owners?

[45:30] No, I don't think we are in a position to tell you exactly who. Then the next day I will receive a call for a new customer. But that's the sex, I mean, it is commercial rent estate. It's basically secured commercial estate as well. Our rate is quite low. So we don't want to be in a position to force sales on the thing. We want to be in a position of strength so that we can make a customer. This is where you call franchise value. Otherwise, when you have a crisis situation, the tendency is everyone

[46:15] will overreact. Do you want to do that? Do you have a property I overreact? I say, no. We want to set aside. We want to be calm. We want to be measured. That, to me, is important. So you have to look at it and look at it. I want to have a P&L. I want to protect my profit. I will sell everything just to make sure. It's more than that. Okay, if there's no other questions, thank you everyone. As usual, if you have any further questions later, do reach out to the communications team.

[47:01] Thank you and have a good day. Thank you.