UOB’s S$885 million allowance build-up ‘prudent’ despite Q3 profit hit: analysts

[SINGAPORE] UOB’s S$885 million move to shore up its allowances is a “prudent” step that brings its provision ratios in line with those of DBS and OCBC, analysts said, even as it resulted in a huge one-off hit to the lender’s third-quarter profit.

On Thursday (Nov 6), UOB shocked the market with a 72 per cent drop in net profit to S$443 million for the three months ended Sep 30, from S$1.61 billion a year earlier.

This came after the bank set aside total allowances of S$1.17 billion – more than four times or S$885 million higher than the S$281 million booked the year before.