Sat, Jun 06, 2020 - 5:50 AM Singapore UNITED Overseas Bank (UOB) is targeting to maintain its 50 per cent dividend payout ratio this year amid t
Sat, Jun 06, 2020 – 5:50 AM
UNITED Overseas Bank (UOB) is targeting to maintain its 50 per cent dividend payout ratio this year amid the challenging business climate.
This will be subject to Common Equity Tier 1 (CET1) ratio staying above 13.5 per cent, as the bank looks to strike a balance between long-term growth opportunities and capital management, UOB chairman Wong Kan Seng told shareholders and observers at the bank’s virtual annual general meeting (AGM) on Friday.
While UOB started from “a position of strength” with a CET1 ratio of 14.1 per cent in Q1, Jefferies analyst Krishna Guha expects the lender to lower its special dividend in FY20, in line with weaker earnings.
UOB’s Q1 net profit fell 19 per cent to S$855 million – from S$1.05 billion a year ago – on declining margins and a surge in impairment charges.
“Dividend for the year will be guided by the desire to retain a strong credit rating; opportunistically grow the balance sheet; adjust for potential risk-weighted asset inflation from credit migration; and sustain the dividend,” said Mr Guha in a…