SINGAPORE (Feb 22): Singapore's United Overseas Bank (UOB) on Thursday cut its 2024 loan growth projections to low single-digits from mid-single digits after posting a stronger-than-forecast 22% jump in fourth quarter net profit.

UOB maintained its 2024 guidance for double-digit fee growth while projecting total income to see positive growth, according to UOB chief executive officer Wee Ee Cheong's earnings presentation slides.

Credit costs for 2024 are expected to be at the lower end of its previous 25 to 30 basis points guidance range.

"Global economic outlook remains uncertain in the near term, but Southeast Asia continues to be a bright spot," Wee said in a statement.

"We are optimistic about Asean's potential, driven by improved domestic demand, robust tourism recovery and strong investment flows into the manufacturing sector as companies reconfigure their supply chains," he added.

Singapore's banks, the largest in Southeast Asia, are set to post higher profits for the fourth quarter because of higher interest rates, though growth momentum is poised to slow as global central banks pivot toward rate cuts and volatile markets weigh on their mainstay wealth business.

Larger peer DBS Group earlier this month reported a 2% rise in fourth quarter net profit that beat forecasts but projected 2024 net interest margin to be slightly below last year as interest rates are expected to soften.

Oversea-Chinese Banking Corp (OCBC) is due to announce its results on Feb 28.

UOB, which is Southeast Asia's third-largest bank by assets, said October-December net profit climbed to S$1.40 billion (US$1.04 billion or RM4.99 billion) from S$1.15 billion a year earlier.

This beat the mean estimate of S$1.37 billion from three analysts polled by LSEG.

The bank recommended the payment of a final dividend of 85 Singapore cents per share, bringing the total dividend for 2023 to S$1.70 per share.

UOB's 2023 net interest margin, a key gauge of profitability, rose to 2.09% from 1.86% a year earlier.

The bank said its wealth asset under management rose 14% to S$176 billion.