KUALA LUMPUR: United Overseas Bank (Malaysia) Bhd (UOB Malaysia) posted a lower net profit of RM1.3 billion in 2022, down 12.9 per cent from RM1.5 billion last year, weighed down by higher-than-usual operating expenses.
In a statement today, UOB Malaysia said the operating expenses rose by 69.7 per cent year-on-year (y-o-y) to RM2.3 billion in 2022, largely attributed to the one-off cost of acquiring Citigroup’s consumer banking business in the country.
“The acquisition was a strategic move by UOB to strengthen its franchise in Malaysia,” it said.
UOB Malaysia said the weaker net profit in 2022 was also partly due to its continued investment in technology infrastructure to support its future business growth.
Nonetheless, it managed to record a total operating income of RM3.9 billion last year — a 15.2 per cent increase y-o-y — mainly driven by stronger non-interest income and net interest income.
At the same time, the bank reported that its net interest income increased by 11.3 per cent y-o-y to RM2.7 billion due to its proactive balance sheet management, coupled with the favourable movements in interest rates throughout 2022.
Meanwhile, its non-interest income surged by 28.3 per cent y-o-y to RM1.1 billion, as the bank continues to leverage its regional capabilities and network.
On its retail lending portfolio, UOB Malaysia said that combined with the retail franchise from the Citi consumer banking business, its gross loans, advances and financing grew significantly to RM105.7 billion in 2022 from RM90.0 billion in the previous year.
Its non-bank deposits portfolio also expanded to RM110.9 billion from RM97.1 billion in 2021.
“The bank’s asset quality remained robust. With the strong post-pandemic economic recovery, the total allowance for expected credit losses declined by 70.9 per cent or RM340.7 million.
“This was largely attributable to the write-back of expected credit losses of non-impaired assets, as well as commitments and contingencies, coupled with lower expected credit loss for impaired assets,” it said.
Chief executive officer Ng Wei Wei described 2022 as a defining year for UOB Malaysia, as it completed the acquisition of Citi consumer banking business in November and strengthened its retail franchise with an expanded portfolio, touchpoints and partner network.
She said the bank remains confident of the country’s long-term growth potential, as reflected by its continued investment, including its new state-of-the-art and green headquarters, UOB Plaza 1 KL. – Bernama