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UNITED Overseas Bank , Singapore's second-biggest lender by assets, posted an unexpected 5.7 per cent fall in quarterly profit as turmoil in credit markets led to more writedowns.
The bank reported on Wednesday net profit of $506 million for the October-December period, from $537 million a year ago.
Analysts were expecting full-year net profit of $2.152 billion in 2008, according to an average forecast from 18 analysts polled by Reuters Estimates, which implied a fourth-quarter net profit of $549 million.
UOB, which had a smaller direct exposure to risky debt compared to local industry leader DBS , made fresh provisions of $128 million for its exposure to collateralised debt obligations (CDOs) and long-term investments in the fourth quarter.
That brought its total impairments to $300 million for the year.
DBS wrote down $240 million or 90 per cent of its collateralised debt obligations linked United States subprime housing market in 2007, the bulk of that coming in the fourth-quarter which pushed its net profit down 18 per cent.
Oversea-Chinese Banking Corp set aside $231 million for losses on risky debt linked to US subprime mortgage crisis, with $10 million taken in the fourth quarter.
OCBC, Singapore's third-biggest bank, saw its quarterly profit fall by 16 per cent and predicted an uncertain year ahead due to a US recession.
UOB, controlled by its chairman Wee Cho Yaw and his family, leads the loan market for small and medium businesses and has benefited from Singapore's strong economic growth.
UOB shares rose 2.6 per cent last year, above DBS which saw an 8.4 per cent decline in its share price hurt by its exposure to risky debt, while OCBC shares rose 7.7 per cent in 2007.
UOB has fallen about 5 per cent this year, but still has outperformed an 11.3 per cent drop on a local index that tracks Singapore's financial stocks , and an 11-per cent fall in the benchmark Straits Times Index . -- REUTERS
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