TL;DR
UOB's 2Q net profit of S$1.11bn met consensus expectations, as an improvement in its interest margins was offset by higher non-performing loans and weak fee income.UOB was able to benefit from rising interest rates to earn higher margins in 2Q22. The Fed's aggressive rate hikes in recent months bode well for its margins in the coming quarters.Worryingly, UOB's non-performing loans rose due to its exposure to a Chinese property company. This will continue to be a risk to watch as interest rates rise and economic growth slows. With DBS and OCBC reporting in the coming week, what UOB has showed us is that 2Q22 earnings may be a mixed bag for Singapore banks.
What happened?
UOB recently reported 2Q22 net profit of S$1.11bn, which met market expectations. But what caught our attention was that while the stock price had initially opened higher by about 0.7%, it eventually closed 2.5% lower...
