UOB halts earnings guidance amid macro uncertainties, but remains ‘committed’ to S$3 billion capital return plan

Singapore’s third-largest lender UOB will suspend its 2025 earnings guidance, with plans to resume this once the macroeconomic situation stemming from US tariffs stabilises.

At the same time, the bank remains “committed” to its three-year, S$3 billion capital return plan, deputy chairman and chief executive officer Wee Ee Cheong said at the bank’s first-quarter earnings call on Wednesday (May 7).

The S$3 billion package, first announced in February, comprises special dividends and a S$2 billion share buyback programme, where shares will be acquired from the open market and cancelled.

Wee noted that the bank’s strong balance sheet and capital base would enable it to weather upcoming uncertainties, even while carrying out the capital return plan.

On Wednesday, UOB reported a net profit of S$1.49 billion for the first quarter ended Mar 31, 2025, unchanged from a year ago.

Responding to a question on whether the bank might consider cutting dividends, Wee said it was “too premature” for such a move.

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“It is still a very fluid situation, and the impact is too early to quantify,” he said, referring to US tariffs.

Brief fall

Jefferies equity analysts Sam Wong, Chen Shujin and Joanna Cheah warned in a Wednesday note that the market could “react negatively” to the bank’s suspension of guidance for 2025.

Shares of UOB fell as much as 2.8 per cent – the steepest drop since Apr 28 – before paring losses and closing 1.4 per cent lower at S$34.49.

However, Bloomberg Intelligence analysts Sarah Mahmud and Diksha Gera noted: “UOB’s suspension of 2025 guidance isn’t a surprise amid a global-growth slowdown.”

The “overarching sentiment” among the bank’s clients is one of uncertainty, said UOB’s group chief financial officer Leong Yung Chee.

“I think there’s a lot of uncertainty and inability to project forward,” Leong said. “Even if you look at some of the global companies – whether it’s Apple, General Motors, Amazon, JPMorgan – everyone is suspending guidance, because their visibility today is not easy.”

In the face of these uncertainties, the bank is focusing on strengthening its balance sheet and assisting clients in navigating the situation, Leong added.

This includes supporting clients through possible trade flow and supply chain shifts, with the bank’s front-line staff “very actively engaging” them.

At its fourth-quarter results in February, UOB had forecast high single-digit loan growth and double-digit fee growth for 2025.

“We are working on the assumption today on those numbers, but those numbers will have to be revised,” Leong said. “We are not yet ready to revise those numbers.”