By Grace Ng

UNITED Overseas Bank on Tuesday posted a 2.5 per cent rise in half-year net profit to $1.13 billion.

Singapore's second-largest local lender said strong interest income growth offset $269 million of impairment charges, partly due to investments linked to the global credit crunch.

UOB's chief executive Wee Ee Cheong noted that 'the past six months have been challenging'.

He added: 'It's not going to be any easier as global institutions seek ways to rebuild their balance sheet and economies cope with slowdown and inflation'.

But the bank, which managed to grow its net interest by 13 per cent from a year ago, noted that its core banking operations have still performed well.