UOB Optimistic on Interest Profit After Fed’s Rate Hike: Q2 Earnings Surge 35%

UOB Optimistic on Interest: Singapore’s United Overseas Bank (UOB) believes the Federal Reserve’s recent interest rate hike will boost interest profit over the next three months. After the Fed raised rates, the bank predicted this. The bank made a substantially larger profit in the second quarter of the previous fiscal year. Their primary net profit rose 35% to 1.5 billion Singapore dollars, or $1.13 billion in the US. The bank’s interest revenue rose 31% throughout the same period. Interest yielded more profit than before. They made 2.13 percent interest, up 50 percentage points. Net interest margin is a key indicator for calculating a bank’s annual profit. The disparity between a bank’s income and expenditures is similar.

After hearing the Fed’s comments, UOB’s CFO, Lee Wai Fai, was optimistic about net interest rates. Federal Reserve initiatives have raised borrowing costs. They tweaked interest rates, raising bank loan rates. This raised borrowing costs. The base loan interest rate is 5.25 percent. 5.5% is the highest. This number is its highest in over twenty years. The reception was positive, and UOB’s share price jumped 0.7% to its highest point in three months.

UOB Optimistic on Interest Profit After Fed's Rate Hike Q2 Earnings Surge 35%

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Loan and wealth management charges decreased since buyers weren’t as enthusiastic. Buyers were less thrilled. To compensate, card fees have increased. UOB has cut its fee income growth estimate, which was previously high. The bank expects a 1%–9% increase in loan volume. They also expect loan interest rates to remain between 0.25% to 0.35% throughout the year. The 0.20 to 0.25 percent forecast was raised after considering the fresh data.

Lee expects the economy and business activity to improve in the second half of the year. Lee anticipates a turnaround. The bank believes clients will invest in the market even if its lending interest rates are high. UOB’s three-month earnings report helps us estimate DBS and Overseas-Chinese Banking Corp.’s earnings. DBS and Overseas-Chinese Banking Corp. will release their reports on August 3 and 4, respectively.

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