UOB Shares Drop as Margin Guidance Falls Short

The bank’s net interest margin slipped to 1.68% for the third quarter, a six-basis-point drop from the previous three months. Chief Financial Officer Leong Yung Chee attributed the contraction to rising U.S. dollar funding costs and a narrowing spread between Singapore dollar loan yields and deposit rates. Consequently, UOB now anticipates its full-year margin will fall below the previously stated range of 1.75% to 1.80%.

Investors reacted by driving the stock down as much as 7.0% to 37.63 Singapore dollars during Wednesday trading. This sell-off was compounded by a 15% quarterly decline in net profit to S$1.25 billion, alongside a 6% drop in total income. While the bank outlined a 2027 outlook featuring mid-single-digit loan growth, Citi analyst Tan Yong Hong warned that these projections will likely trigger downward revisions to market earnings-per-share estimates.