United Overseas Bank (UOB) Ltd.’s fourth-quarter profit barely rose as swelling expenses and provisions for bad loans capped gains in income.
Net income gained 0.3 percent to S$788 million ($564 million) for the three months ended Dec. 31 from a year earlier, Singapore’s third-biggest bank said Tuesday in an exchange statement. That matched the average estimate of seven analysts surveyed by Bloomberg.
The company set aside more cash for soured debt as a commodity price slump and the economic slowdown in Greater China and Southeast Asia weigh on the profitability of Singapore’s banks. UOB is the first of the nation’s lenders to report results for 2015, when a rally in domestic interest rates enabled them to charge borrowers more for loans.
“Financial markets will continue to grapple with volatility and uncertainty in 2016, underpinned by ongoing concerns such as the impact of falling oil prices and China’s slowdown on the global economy,” Chief Executive Officer Wee Ee Cheong said in the statement. “Our view is that the risks are largely manageable and the underlying economic fundamentals are strong enough to withstand the shocks even as we enter an environment of slower growth.”
UOB shares fell 1.3 percent to S$17.62 as of 12:39 p.m. in Singapore. The stock has dropped 10 percent this year.