CEO’s Message on UOB Group
1H/2Q18 Results

Dear Investors,

The UOB Group (the "Group") achieved yet another record quarter with profit crossing the S$1 billion mark in the second quarter of 2018 (2Q18). With that, our half-year profit totalled S$2.1 billion, up 24% from a year ago on the back of a broad-based revenue growth and stable asset quality. This drove an increase in return on equity and on risk-weighted assets to 11.6% and 2.04%, respectively. The Board is pleased to declare a higher interim tax-exempt dividend of 50 cents per share, representing a payout ratio of 41%. This underlines our commitment to a 50% dividend payout ratio, subject to a minimum Common Equity Tier 1 Capital Adequacy Ratio (CAR) of 13.5% and sustainable financial performance.

Net interest income expanded 13% year-on-year to S$3.0 billion, backed by healthy loan growth of 10% and wider margins. Fee and commission income too clocked a robust 15% growth to S$1.0 billion, backed by our loan-related, wealth management, fund management and credit card fees businesses, while trading and investment income moderated against softer market conditions. Cost-to-income was stable at 43.9% as we paced ongoing investments in our capabilities, with expenses increasing 11% to S$2.0 billion.

Asset quality stayed healthy, with steady non-performing loan ratio of 1.7% and total credit costs of 13 basis points in 2Q18. Non-performing assets reserve cover remained adequate at 89%, or 190% after taking collateral into account. Amid growing global uncertainties, we have been disciplined in maintaining our balance sheet strength, with our funding and capital positions staying robust and well above regulatory requirements. All-currency liquidity coverage ratio for the quarter was an average 142%, while loan-to-deposit ratio and net stable funding ratio were stable at 85.7% and 110% respectively as of 30 June 2018. The Group’s Common Equity Tier 1 CAR stood at 14.5% and leverage ratio was 7.7%.

Looking ahead, we will remain vigilant and nimble amid rising uncertainties globally. As a long-term player, we will continue to invest in capabilities to serve our customers’ evolving needs, given our belief in the region’s connectivity potential. Building on our extensive network, our upcoming digital bank launch will help us to scale up our customer franchise across Southeast Asia.

On behalf of the management, thank you for your continued support as our valued investors.



Wee Ee Cheong
Deputy Chairman & Chief Executive Officer
3 Aug 2018