UOB reports 6% decline in profit: Our Quick Take

UOB 2Q25 earnings highlights

UOB Group announced its earnings for the second quarter of 2025. Key highlights include: 

• Net profit of S$1.3 billion in 2Q 2025, down 6% year-on-year
• Net profit of S$2.8 billion in 1H 2025, down 3% year-on-year
• First half interim dividend of S$0.85 per share (50% payout ratio) and a special dividend of S$0.25 per share previously announced, translating to a total 1H 2025 dividend of S$1.10 per share.

UOB Group has reported net profit of S$1.3 billion for 2Q25.  This represents a 6% decrease compared to the previous year. 

The decline was largely driven by lower net interest income as net interest margin narrowed.  This was partly offset by higher fee income and other non-interest income.

Fee income increased by 3% year-on-year to S$636 million. Trading and investment income rose by 4% year-on-year to S$414 million, led by sustained momentum in customer demand for hedging solutions. 

Net Interest Income fell to S$2.34 billion in 2Q25, as net interest margin declined due to lower asset yields amid falling benchmark rates.   

UOB's net interest margin eased to 1.91% in 2Q25 from 2.0% in 1Q25 and 2.05% in 2Q24, on asset repricing mitigated by improved funding and balance sheet management. 

Fee Income reached S$829 million in 2Q25, representing a growth of 3% compared to 2Q24. This was fueled by broad-based growth across wealth management fees, loan-related services and credit card fees. 

The asset quality remained healthy as non-performing loan (NPL) ratio at 1.6%, was unchanged from 1Q25.  New NPL formation was offset by higher recoveries and write-offs during the quarter.

UOB proposed an ordinary dividend of S$0.85 per share and a special dividend of S$0.25 per share as the 2^nd tranche of special dividend previously announced.

This translates to a total 1H 2025 dividend of S$1.10 per share, a 25% increase over the previous year. 

Find out how much dividends you will potentially receive as a shareholder of UOB with the calculator below. Note that this excludes the special dividend announced.

Following a pause in its earnings guidance with uncertainty brought about by US trade tariffs, UOB reinstated its guidance for 2025 total income to be higher than in 2024, driven by a low single-digit loan growth and high single-fee income growth. 

At the same time, costs are likely to be contained with the cost-to-income ratio at around 42%, while credit costs are expected to be benign in the 25-30 basis points (0.25-0.3%) range. 

What would Beansprout do? 

Annualising the interim ordinary dividend of 85 cents per share and adding in the special dividend of 50 cents per share, UOB currently offers an annualised dividend yield of 6.0% based on its closing price of S$36.45 on 7 Aug.   

This would be on par with the dividend yield for DBS of 6.1% (including capital return dividend), and slightly above the dividend yield of OCBC. 

UOB currently trades at a price-to-book valuation of 1.28x, above its historical average of 1.0x. 

Related links:

• UOB share price and share price target
• UOB dividend forecast and dividend history

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