UOB’s Q4 net profit down 5.7% to S$506m

United Overseas Bank (UOB), Singapore’s second-biggest lender by assets, posted a 5.7 percent fall in its fourth-quarter profit, as turmoil in credit markets led to more write-downs.

The bank reported net profit of S$506 million for the October-December period, down from S$537 million a year ago.

UOB, which had a smaller exposure to risky debt compared to local industry leader DBS, made fresh provisions of S$128 million for its exposure to debt derivatives and long-term investments in the fourth quarter, bringing its total write-downs in the year to S$300 million.

Net interest income in the fourth quarter was S$743 million, up 5.9 percent from S$702 million a year earlier.

Non-interest income was S$532 million, up 2.9 percent from last year’s S$517 million.

In a statement, UOB chief executive Wee Ee Cheong said 2008 “looks set to be a challenging year”.

World financial markets have been battered since last August by fallout from a crisis in the US sub-prime, or high-risk, loan sector which forced commercial banks to tighten lending criteria leading to a credit crunch.

Banks around the world suffered multi-billion-dollars losses linked to sub-prime loans given to US homebuyers with risky credit histories. – CNA/ir/ch

Source : Channel NewsAsia – 27 Feb 2008

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