(Feb 19): United Overseas Bank Ltd joined larger rival DBS Group Holdings Ltd in returning excess capital to shareholders after delivering record-high earnings for the year.

Southeast Asia’s third-largest bank will distribute S$3 billion (US$2.2 billion or RM9.7 billion) over the next three years via share buybacks and special dividends, the Singapore-based firm said Wednesday. DBS also last week unveiled a quarterly dividend program, on top of a S$3 billion buyback plan announced in November.

Both stocks have been hitting new highs with the news, putting the spotlight on Oversea-Chinese Banking Corp that has so far kept its capital plans close to its chest. The region’s second-biggest lender reports earnings Feb 26.

UOB’s capital return plan “is prudent and optimises its capital structure”, Bloomberg Intelligence credit analyst Rena Kwok said in a research note. The move is leaving a S$600 million surplus capital above its 14% common equity tier 1 operating range post-distribution, she said.

UOB also reported Wednesday that net income for the three months ending December rose 3% to S$1.54 billion from a year earlier, largely in line with analysts’ estimates of S$1.5 billion. UOB shares were trading slightly down.

The results were supported by lending growth, as fee income and other non-interest income were relatively unchanged from a year ago. Allowance for credit and other losses spiked 50% as new soured loans rose.

Chief executive officer Wee Ee Cheong said a rise in new non-performing loans is “manageable” and maintained the 2025 outlook for credit costs around 25 to 30 basis points. He is also expecting high single-digit loan growth and double-digit fee growth for the year.

It’s also the last earnings that chief financial officer Lee Wai Fai presents. Lee will step down in April after two decades in the role and Leong Yung Chee, head of group corporate banking, will succeed him.

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