Singapore's UOB profit posts surprise profit rise
SINGAPORE, Aug 5 (Reuters) - Singapore's second-largest lender, United Overseas Bank (UOBH.SI), posted an unexpected 2.7 percent rise in quarterly profit in spite of financial market turmoil due to strong loan business and investment gains.
The bank said its outlook is challenging.
Loans by Singapore banks grew at 25 percent in the second quarter from a year earlier, the fastest pace since 1990, underpinned by a construction boom, which partially offset the impact of the global financial turmoil.
But economic growth is expected to slow this year, while inflation could climb to as high as 7 percent, curbing loan demand.
UOB said on Tuesday April-June net profit rose to S$601 million ($438 million) from S$585 million a year ago. Analysts had predicted net profit of S$530 million or a drop of 9.4 percent, according to the average of four forecasts compiled by Reuters.
UOB, controlled by chairman Wee Cho Yaw and his family, is considered the leader in Singapore's loan market for small- and medium-sized businesses, and has benefited from demand for property and construction.
UOB shares fell 2.7 percent in April-June, underperforming shares of sector leader DBS Group (DBSM.SI) which rose 4.8 percent, and third-ranked Oversea-Chinese Banking Corp's (OCBC.SI) 0.9 percent rise.
The benchmark Straits Times Index .FTSTI fell 2 percent in the second quarter. DBS and OCBC report their quarterly results on Thursday. (Reporting by Saeed Azhar, Editing by Kim Coghill)
