UOB not ‘overly alarmed’ by US tariff situation, impact unlikely to match Covid-era: Wee Ee Cheong

[SINGAPORE] A strong balance sheet and capital base will help UOB navigate uncertainties arising from US tariffs, said deputy chairman and chief executive officer Wee Ee Cheong.

Speaking at the bank’s first-quarter earnings call on Wednesday (May 7), he noted that trade forms only about 10 per cent of UOB’s total loans portfolio, limiting the bank’s direct exposure.

In response to a media question comparing the impact of tariffs with the challenges faced during the Covid-19 period, Wee pointed to the pandemic as a tougher test.

He explained: “We are willing to pay dividends, we are willing to have a capital reduction – I don’t think we need to be overly alarmed.”

He was referring to UOB’s S$3 billion capital distribution plan, announced in February, which will proceed as planned.

The bank also said on Wednesday that it will halt its 2025 earnings guidance, with plans to resume this once the macroeconomic situation stabilises.

Group chief financial officer Leong Yung Chee added that while the pandemic caused a “sudden shutdown” in some industries, the current situation is more of a “slowdown” and adjustment of supply chains, with some potential cost increases.

“You would see a period of volatility and adjustments, but I think the severity is… going to be moderated over time,” said Leong, who took on his current role in April.

Flat Q1 profit

The bank on Wednesday reported a net profit of S$1.49 billion for the first quarter ended Mar 31, 2025, unchanged from a year ago, and below the S$1.54 billion consensus forecast in a Bloomberg survey of five analysts.

Net interest income rose 2 per cent to S$2.41 billion, driven by strong loan growth, though net interest margin edged down to 2 per cent from 2.02 per cent a year earlier.

Net fee income jumped 20 per cent to S$694 million, supported by robust loan-related and wealth activities, while other non-interest income fell 5 per cent to S$554 million on lower trading and investment income.

UOB’s non-performing loans ratio rose slightly to 1.6 per cent from 1.5 per cent, while credit costs climbed to 35 basis points (bps) in Q1, from 25 bps in Q4, as the bank set aside more pre-emptive allowances.

It is the first of Singapore’s three local banks to report Q1 earnings, with DBS and OCBC set to release their results on Thursday and Friday, respectively.

UOB shares were down 0.9 per cent or S$0.31 at S$34.67 as at 11.53 am on Wednesday, following the earnings release.