Singapore's UOB sees profits surge


Singapore's United Overseas Bank saw half-year profits surge 30 percent

SINGAPORE (CNN) -- Singapore's United Overseas Bank (UOB), reported a 30 percent surge in half-year net profits from last year to S$591 million ($334 million).

The boost in earnings for Singapore's biggest bank was largely due to it's takeover of rival Overseas Union Bank (OUB) last year.

"Profit growth was largely driven by higher net interest income from an enlarged loan portfolio, post-OUB acquisition, as well as net interest margin and increased fee and commission income," the bank said in a statement.

Net interest income reached S$1.09 billion, up 85 percent from S$588.5 million a year ago.

UOB earned S$274.43 million in fees and commissions, a 70 percent increase from last year.

Due to the purchase of OUB, operating expenses rose 46 percent, but the bank said it was on track to achieve cost savings of S$250m after consolidating the operations of OUB in June, well ahead of schedule.

UOB Deputy Chairman and President Wee Ee Cheong said in an analysts briefing that the bank would strengthen its expansion plans into Southeast Asia and greater China. This was a bid to raise the contribution of offshore operations to pre-tax profit from the current 33 percent to 40 percent by 2010.

He said the bank would continue to strengthen its presence in Malaysia, Indonesia, Thailand and the Philippines.

Its Malaysian operations contributed more than 10 percent to the bottom line, but UOB still had to realise the full potential of the Malaysian market where it has the largest branch network for foreign banks, Wee said.

He described the Indonesian operations as profitable and was confident Thailand would become "an important contributor" to earnings in the future.

UOB, with S$113 billion worth of assets, operates in Malaysia, Indonesia, the Philippines, Thailand and South Korea.