UOB shares hit four-month low as Q3 profit misses analyst estimates

United Overseas Bank's (UOB) shares plummeted to their lowest level in four months after the company reported third-quarter net profit that fell short of analyst projections. The Singapore lender's net profit for the three months ended September 30 was S$1.25 billion, up 182% from the previous year but 9% below the Bloomberg consensus estimate.

This missed the mark despite a significant increase in net interest income, which grew by 1% year-on-year to S$2.28 billion. However, net interest margins narrowed to 1.68% due to rising deposit costs, while non-interest income declined by 29% to S$370 million. The bank's fee income, which increased by 19% to a record S$733 million, was offset by a 33% drop in trading and investment income.

UOB's CFO, Leong Yung Chee, expects loan and fee income growth to continue through 2027, but operating costs are projected to rise by a mid- to high-single-digit percentage next year.