Is UOB A Buy or A Bye?

🌟🌟🌟The 4.6% drop in UOB $UOB(U11.SI)$  following its earnings release this morning has clearly rattled the market, especially as it follows record highs across the STI Index.  To determine if this is a Buying opportunity or a Bye, we have to look past the headline miss.

The Knee Jerk Reaction from the Market 

The sell off was likely a reaction to 3 specific unpleasant surprises that the market did not like:

Dividend Cut:  The SGD 0.71 final dividend was a 23% drop from last year.  This hurts income seeking investors who were spoiled by DBS's recent generosity.

Guidance Trim:  CEO Wee Ee Cheong's more cautious outlook on 2026 fee growth - now in high single digits, suggests the post Citigroup integration sprint is normalising.

The Miss:  A 4Q 25 profit of SGD 1.41 billion against the expected SGD 1.45 billion is a small miss of under 3%.  But in a market at all time highs, any miss is treated as a Sell signal.

The Jewel in the Crown: UOB Wealth Management Performance 

While the Big Money in trading often looks at net profit, long term wealth is built in recurring fee Income.  Here is how UOB's Wealth Division dominated in FY2025:

Record Breaking Fees:  Net fee Income hit a new historic high of SGD 2.6 billion in 2025.  This is driven largely by a 14% year on year surge in wealth management income.

AUM Milestone:  High net worth Assets Under Management (AUM) rose 6% to reach SGD 201 billion by end 2025.

The Conversion Success:  This growth was fueied by UOB's ability to help clients convert traditional deposits into invested AUM, which generates higher margin recurring fees.

The 2026 Target:  UOB is on a mission to increase its proportion of invested wealth assets to 50% by late 2026.

Why Wealth Division is a "Fire Horse" Gamechanger 

Insulation from rates:  As benchmark interest rates potentially soften, traditional lending income or Net Interest Margin faces pressure.  Wealth fees provide a diversified, non interest revenue stream that keeps the compounding engine running.

The Citigroup Synergy:  The integration of Citigroup's South East Asian retail assets into UOB is now complete.  This has provided UOB with an enlarged regional franchise of 8.4 million customers, many of whom are prime candidates for high margin wealth products.

ASEAN's Safe Haven:  Singapore remains the global destination for capital inflows.  UOB's deep regional roots mean that they are capturing the inflows from the rising affluent class across Indonesia, Malaysia, Thailand and Vietnam.

What Should Investors Do?

The Strategy : Stay Invested and Utilise Dollar Cost Averaging 

This is exactly the type of volatility where "Timing the Market" fails.  If you sell now, you risk missing the recovery when $OCBC Bank(O39.SI)$  reports tomorrow or when the US Supreme Court "Tariff Refund" stimulus hits the broader market.

For New Investors :  Use this 4% dip as a Dollar Cost Averaging or DCA entry point into UOB or through $STI ETF(ES3.SI)$  .  Since UOB is a major holding for STI ETF, you are buying the correction with the safety of diversification.

For Current Holders:  Do not interrupt the process of compoundingm. The 1.5% Non Performing Loan Ratio shows that UOB's asset quality is stable.  The dividend, while lower than last year, still provides a healthy 5.7% yield.  This is significantly higher than inflation or fixed deposits.

Is UOB A Buy?  The Case for "The Waiting"

If we apply the late great Charlie Munger's lens - The Big Money Is In the Waiting, this pullback looks more like a healthy mean reversion than a broken stock.

Most of the 23% profit drop was due to the SGD 615 million pre emptive provision taken in Q3.  This was an exercise in caution taken to insulate UOB against US and China real estate risks.  Without those one offs, the underlying engine is still producing record fee income of SGD 2.6 billion.

Valuation Gap:  UOB remains the most undervalued of the Big 3.  Trading at a P/B ratio of 1.19x compared to DBS's 2.39x, you are buying a top tier bank at a massive discount.

Concluding Thoughts 

In the year of the Fire Horse, even the strongest runners stumble.   UOB's 4% drop is a stumble, not a fall.  As the STI prepares for the next leg toward 6,500, these pullbacks are "sales" that allow patient investors to build "Big Money" positions.

OCBC $OCBC Bank(O39.SI)$  reports tomorrow on February 25 2026.  With UOB's Wealth fees hitting record highs, do you think OCBC will show similar strength?    Will OCBC deliver a special Hong Bao dividend to make shareholders happy?

Stay tuned for my comprehensive article tomorrow after the earnings report.

To My Tiger Family:

May your Discipline outrun the volatility.

May your Success stay on Autopilot.

May you have the Wisdom to buy while others panic!

Huat Ah!  The Iron Stallion is just catching its breath! 🐯🐯🐯🇸🇬🇸🇬🇸🇬🧧🧧🧧🌈🌈🌈💰💰💰🐎🐎🐎

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