Q3 net profit S$1.38 bln vs S$1.46 bln estimate
"The macroeconomic environment could remain bumpy" - CEO
Net interest margin 2.09% vs 1.95% a year earlier
(Adds CEO comments from briefing in paragraph 5, analyst comment in paragraph 3)
By Yantoultra Ngui
SINGAPORE, Oct 26 (Reuters) - Singapore's United Overseas Bank (UOB) expected a stronger outlook for next year including improved loan and fees growth, as it reported on Thursday a weaker-than-expected 1% drop in third-quarter net profit from a year earlier.
UOB, Singapore's third-largest bank by assets, projected mid single-digit loan growth and double-digit fee growth for its 2024 outlook, versus low-to-mid single-digit loan growth and high single-digit fees growth for this year's outlook.
"The double-digit fee growth projection for its 2024 outlook looks promising, given that net fee income delivered year-on-year contraction for the bulk of last year," said Yeap Jun Rong, IG Asia's market analyst.
The bank, Southeast Asia's third-biggest, also projected margins to remain at current levels for 2024, but foresaw credit cost at around 25 to 30 basis points for next year versus just around 25 basis points for rest of 2023.
Wee Ee Cheong, UOB's deputy chairman and CEO, said he believed "the situation in China will stabilise and continue to improve on the back of support measures recently announced."
UOB said July-September net profit dropped to S$1.38 billion ($1 billion) from S$1.40 billion a year earlier, mainly on the back of higher allowances for credit and other losses, as well as Citigroup integration costs.
The profit was lower than the mean estimate of S$1.46 billion from four analysts polled by LSEG.
Last year, UOB acquired Citigroup's consumer business in four Southeast Asian markets for about S$5 billion, its biggest deal in two decades. When completed, the move will double its retail customer base in these markets.
"Our Citigroup integration is on track," Wee said. "Integration for Indonesia, Thailand and Vietnam is progressing as planned after we successfully migrated all Citigroup customers in Malaysia to our platform."
($1 = 1.3723 Singapore dollars) (Reporting by Yantoultra Ngui; Editing by Stephen Coates)