Why is United Overseas Bank stock sliding today?

United Overseas Bank stock slid 6.4% to S$37.87 on Wednesday after the Singapore lender’s third-quarter results fell short of market expectations, with a miss on both the bottom line and key margin metrics driving the sharp sell-off.

UOB reported net profit of S$1.25 billion for the three months ended September 30, up 182% from S$443 million a year earlier, but below the Bloomberg consensus estimate of around S$1.37 billion — a shortfall of about 9%. On a sequential basis, the result was down 15% quarter-on-quarter as prior-quarter divestment gains did not recur.

Trading and investment income slid 33% year-on-year to S$322 million owing to less favourable market conditions, weighing on other non-interest income, which fell 29% year-on-year to S$370 million. UOB’s net interest margin also narrowed 6 basis points quarter-on-quarter to 1.68% due to higher funding costs.

On the positive side, net fee income jumped 19% on an annual basis to a record S$733 million, helped by strong growth in wealth, cards and loan-related activities. The bank set aside S$258 million for credit and other losses, down 81% from a year earlier, while its non-performing loan ratio improved to 1.5% from 1.6%; CFO Leong Yung Chee said the bank expects loan and fee income growth to continue into 2027. However, forward guidance was insufficient to offset the headline miss.

Singapore’s equity benchmark Straits Times Index was on track for a correction as heavyweight bank shares slid on concerns over the profit outlook, with the gauge falling as much as 1.4% on the day and cumulative losses from its September peak reaching 10% — a threshold commonly used to define a market correction.