UOB (SGX: U11) Stock Outlook: Q3 2025 Profit Slump, Dividend Strength and 2026 Forecast

United Overseas Bank Limited (UOB, SGX: U11) has just delivered one of its most eye‑catching quarters in years: a 72% plunge in Q3 2025 net profit driven by hefty pre‑emptive provisions, even as its underlying franchise and dividend story remain intact. ^[1]

As of 1 December 2025, UOB’s share price trades around S$34.1–S$34.2, with most 12‑month analyst targets clustered in the mid‑S$30s, implying only modest upside — but backed by a still‑fat dividend yield. ^[2]

This article pulls together the latest news, forecasts and analyses on UOB stock up to 1 December 2025 to help you understand what’s really going on and what the market is pricing in for 2026.

1. UOB Share Price and Valuation Snapshot (1 December 2025)

On 1 December 2025:

Share price: About S$34.14–S$34.18 per share on the Singapore Exchange. ^[3]
Net asset value per share: Around S$28.34 as at 30 September 2025. ^[4]
Price-to-book (P/B): Roughly 1.2x, calculated from the figures above.
Consensus 12‑month target price (various sources):
- Beansprout: S$34.57, about 1.1% upside from current levels. ^[5]
- SGinvestors.io: Targets from S$30.40 to S$38.20, with median S$36.45 (≈6.8% upside) and average S$35.38 (≈3.6% upside). ^[6]
- TradingView compilation: Mean target around S$35.79, with high S$40.10 and low S$30.40. ^[7]

At current levels, UOB trades:

At a valuation discount to DBS (which typically trades closer to 2x book) but in line with its long‑term range. ^[8]
With low‑ to mid‑single‑digit price upside implied by most street targets — meaning the investment case today is primarily driven by dividends and capital returns, not aggressive capital gains.

2. Q3 2025 Results: 72% Profit Drop, But Mostly Front‑Loaded Provisions

2.1 Headline numbers

For the quarter ended 30 September 2025 (3Q25), UOB reported: ^[9]

Net profit:S$443 million, down 72% year‑on‑year (3Q24: S$1.61 billion).
Operating profit:S$1.86 billion, down 16% YoY.
Total income:S$3.40 billion, down 11% YoY.
Total allowances for credit and other losses:S$1.36 billion in 3Q25 alone.
- Includes S$615 million of pre‑emptive general allowances to strengthen coverage.

Management’s message is clear: this was a strategic “clean‑up” quarter, not a collapse in the franchise. UOB’s official performance highlight and subsequent commentary stress that the pre‑emptive provisions are not expected to affect the 2025 final dividend, signalling confidence in its capital position and earnings power. ^[10]

2.2 Margin compression and revenue trends

UOB’s income picture is dominated by lower interest margins:

Net interest income (NII): About S$2.27 billion in 3Q25, down 8% YoY. ^[11]
Net interest margin (NIM):
- 1.82% in 3Q25, down from 2.05% a year earlier. ^[12]
- For 9M25, NIM averaged 1.91%, down 13 bps from 2.04% in 9M24. ^[13]

Drivers:

Falling global benchmark rates and competitive deposit pricing pressured lending spreads. ^[14]
UOB still delivered loan growth of about 5% YoY, with gross customer loans at around S$351 billion. ^[15]

On the non‑interest side:

Net fee income:S$615 million in 3Q25 (‑2% YoY; ‑3% QoQ).
- Strength in wealth, loan‑related and card fees was offset by higher rewards expenses. ^[16]
Other non‑interest income:S$518 million, down 30% YoY from exceptionally strong trading and investment gains in 3Q24, but still up 5% QoQ. ^[17]

In short, top‑line pressure is real but not dramatic: total income fell only 3% for 9M25 despite a meaningful NIM squeeze, thanks to decent fee momentum and treasury customer flows. ^[18]

2.3 Provisions, credit costs and asset quality

The real story of Q3 is provisions:

Total allowances:S$1.36 billion in 3Q25 vs S$304 million a year ago.
Total credit costs on loans: Jumped to 134 bps in 3Q25, versus 34 bps in 9M24 and 32 bps in 2Q25. ^[19]
General (pre‑emptive) allowance:S$615 million set aside in the quarter to guard against macroeconomic and sector‑specific risks. ^[20]

Yet, underlying asset quality remains remarkably stable:

Non‑performing loan (NPL) ratio:1.6%, unchanged QoQ and only slightly higher than 1.5% a year ago. ^[21]
Coverage ratios:
- Performing loan coverage: up to 1.0%.
- NPA coverage:100%, or 240% including collateral. ^[22]

This is classic “rainy‑day umbrella” provisioning. UOB is front‑loading credit costs while NPLs are still low, giving itself buffer room if growth slows or stress surfaces in certain sectors in 2026.

2.4 Capital and liquidity still strong

Despite the step‑up in allowances and ongoing buybacks and dividends, UOB’s capital and liquidity remain solid: ^[23]

CET1 ratio:14.6% as at 30 September 2025 (down from 15.5% in 2024 but well above MAS requirements).
All‑currency Liquidity Coverage Ratio (LCR): about 143%, comfortably ahead of the 100% regulatory minimum.
Net Stable Funding Ratio (NSFR):116%, also above the 100% minimum.

From a balance‑sheet perspective, UOB continues to look conservatively run and well‑capitalised, even after the Q3 “kitchen sink” on provisions.

3. Dividend and Capital Return: The Heart of the UOB Investment Case

For many investors, UOB is first and foremost a dividend and capital‑return story.

3.1 Recent dividend track record

Key facts from recent years: ^[24]

FY2024:
- Net profit: about S$6.05 billion, up 6% year‑on‑year.
- Ordinary dividend per share:S$1.80.
- Special “90th anniversary” dividend:S$0.50 per share, scheduled across 2025.
1H 2025:
- UOB declared an interim ordinary dividend of S$0.85 and a S$0.25 special dividend, representing the second tranche of the 50‑cent anniversary payout. ^[25]

At today’s share price around S$34.1–34.2:

Trailing ordinary dividend yield is roughly 5.3%.
Including the anniversary special, the total payout implies a yield closer to 6.5–6.8% (though the special is not recurring by design).

Management has also explicitly stated that the large Q3 general allowance will not affect the 2025 final dividend, signalling a desire to preserve payout credibility. ^[26]

3.2 Share buybacks: S$3 billion capital distribution in focus

UOB has been aggressively returning capital through buybacks:

To mark its 90th anniversary, UOB announced a S$3 billion capital‑distribution package comprising a 50‑cent special dividend and a S$2 billion share buyback programme. ^[27]
In September 2025 alone, UOB bought back about S$561 million of its own shares — nearly 1% of its market capitalisation — signalling that management sees value at prevailing prices. ^[28]

Buybacks at around 1.2x book value are accretive to earnings per share and support the share price, especially when earnings growth is more muted.

For income‑focused investors, the combination of:

high ordinary dividend yield,
one‑off 90th anniversary special dividend, and
sizeable buybacks

makes UOB one of the more shareholder‑friendly blue‑chip stocks on the SGX right now.

4. 2026 Outlook and Guidance: Lower Margins, Higher Fee Ambitions

UOB’s 2026 outlook, as communicated during Q3 results, is more cautious than earlier in the year and arguably more cautious than peers DBS and OCBC. ^[29]

4.1 Official guidance

From management’s guidance and subsequent coverage: ^[30]

Net interest margin (NIM):
- Projected 1.85–1.90% for 2025.
- Expected to fall to 1.75–1.80% in 2026 as global rates normalise.
Loan growth:Low single‑digit in 2026.
Fee income: Targeting high single‑ to double‑digit growth, riding on wealth, cards and loan‑related fees.
Total credit costs: Expected to normalise to 25–30 bps in 2026, down sharply from the 134 bps spike seen in Q3 2025.

In other words, management is signalling:

A soft landing in margins, not a collapse.
Provisions front‑loaded in 2025 to avoid recurring spikes.
A heavier reliance on fee income and customer‑driven treasury flows to sustain top‑line growth.

4.2 Macro and ASEAN franchise angle

UOB’s strategy remains tightly linked to ASEAN growth:

At its “Gateway to ASEAN” conference in October 2025, the bank projected inbound FDI into ASEAN rising to about US$370 billion by 2030, emphasising the region’s growing relevance amid supply‑chain shifts. ^[31]
UOB continues to integrate the acquired Citibank consumer businesses in Thailand, Malaysia, Vietnam and Indonesia, which has been visible in stronger card billings and wealth flows since 2024. ^[32]

UOB’s own asset‑management arm, UOB Asset Management (UOBAM), describes markets as being at an “inflection point” heading into 4Q 2025, but remains constructive on risk assets over the medium term, which aligns with the bank’s focus on wealth and fee income growth. ^[33]

5. Funding and Balance‑Sheet Actions: Covered Bonds and Capital Buffers

Beyond provisions, UOB has been fine‑tuning its funding mix:

In late November 2025, UOB priced €850 million of fixed‑rate covered bonds due 2030, with a 2.718% annual coupon, expected to be issued on 1 December 2025. ^[34]

Covered bonds are typically high‑quality, collateralised funding instruments that help:

diversify UOB’s investor base,
modestly lower its funding cost in euros, and
support longer‑dated lending in foreign currencies.

Combined with CET1 comfortably above local regulatory minima and strong liquidity ratios, these moves underscore that UOB is not acting from a position of stress, but rather reinforcing an already solid balance sheet ahead of a potentially choppy 2026. ^[35]

6. Analyst Ratings, Target Prices and Market Sentiment

6.1 Street targets after Q3 2025

According to SGinvestors.io, based on the latest reports up to 1 December 2025: ^[36]

Target price range:S$30.40 to S$38.20.
Median target:S$36.45 (≈6.8% upside vs S$34.14).
Average target:S$35.38 (≈3.6% upside).
Recent calls include:
- OCBC Investment: BUY, TP S$38.20 (6 Nov 2025).
- Maybank Research: HOLD, TP S$36.80 (20 Nov 2025).
- Phillip Securities: NEUTRAL, TP S$30.40 (14 Nov 2025).

Other sources reinforce this picture:

Beansprout shows a consensus price target around S$34.57, only slightly above the current price, and highlights UOB primarily as a dividend and capital‑return play. ^[37]
TradingView’s consolidated forecast puts the average target at S$35.79 with a high case at S$40.10 and low at S$30.40. ^[38]
MarketScreener notes that Macquarie upgraded UOB to “Neutral” with a target around S$31.91, reflecting a more cautious stance post‑Q3 as margins compress. ^[39]

Overall, the consensus narrative is:

“Earnings will be under pressure from lower margins, but capital buffers and shareholder returns remain attractive; valuation is reasonable, not screamingly cheap.”

6.2 Relative positioning vs DBS and OCBC

The Business Times summarises street sentiment neatly: UOB’s outlook is seen as more cautious than DBS and OCBC after its Q3 miss and elevated provisions, with investors more concerned about asset quality and margin trajectory for UOB than for its two larger peers. ^[40]

Yet, sector‑wide commentary (for example from StashAway’s big‑three bank outlook) still views all three as core, dividend‑rich holdings with long‑term return profiles that have beaten the STI over 3‑ and 5‑year horizons. ^[41]

7. Key Upside Drivers and Risks for UOB Stock

7.1 Potential upside drivers

Provision “big bath” sets the stage for smoother earnings
- If credit costs normalise to 25–30 bps in 2026 as guided, earnings could rebound from the depressed Q3 base even with some NIM slippage. ^[42]
Wealth, cards and ASEAN consumer growth
- Citi ASEAN integration continues to show up in higher card billings and wealth flows, and UOB remains well‑positioned to benefit from rising ASEAN wealth and cross‑border trade. ^[43]
Buybacks at 1.2x book value
- Ongoing execution of the S$2 billion share buyback could lift EPS and ROE over time, supporting a rerating towards the upper end of the target price range if profitability stabilises. ^[44]
Income resilience from diversified fee engines
- Fees from wealth management, cards and loan‑related activities have held up even as NIM softens, providing a partial hedge against falling rates. ^[45]

7.2 Key risks

Faster‑than‑expected rate cuts
- If the US Fed or regional central banks cut faster or deeper than expected, NIM could undershoot the 1.75–1.80% guidance, putting further pressure on earnings. ^[46]
Credit cycle turns worse than anticipated
- UOB has built pre‑emptive buffers, but a sharp downturn in specific sectors (e.g., commercial property, trade‑linked corporates) could force additional provisions beyond current expectations.
Relative underperformance vs DBS and OCBC
- If peers continue to deliver stronger fee and trading income, UOB could lag on ROE and valuation, keeping its P/B multiple subdued relative to DBS and possibly OCBC. ^[47]
Regulatory and capital requirements
- MAS could tighten macro‑prudential or capital rules in response to macro conditions, potentially constraining room for further buybacks or large special dividends, although current capital buffers leave some headroom. ^[48]

8. Is UOB (SGX: U11) Stock a Buy Right Now?

Putting everything together as of 1 December 2025:

Valuation: Around 1.2x book and low‑ to mid‑single‑digit upside to the average 12‑month target price.
Income profile: Ordinary dividend yield about 5%+, and including this year’s special, total yield closer to 6–7%, backed by strong capital and explicit management commitment to maintain the 2025 final dividend. ^[49]
Risk profile: 2026 will almost certainly bring lower NIMs, but UOB has front‑loaded provisions, kept NPLs in check, and diversified income towards fees and treasury flows.

For income‑oriented, long‑term investors, UOB still looks like a solid, conservative bank stock:

You are mainly paid through dividends and buybacks, not explosive earnings growth.
The Q3 2025 profit collapse is more accounting shock than franchise damage, thanks to pre‑emptive provisions and still‑healthy asset quality.

For more growth‑oriented or risk‑averse investors, there are reasons to wait:

Street targets only imply modest upside, and peers like DBS may offer stronger growth and ROE, albeit at richer valuations. ^[50]
Macro uncertainty and the possibility of further rate cuts could keep bank stocks volatile into 2026.

Final thought

UOB’s Q3 2025 numbers look frightening at first glance, but once you peel back the provisions, you see a bank that is sacrificing short‑term earnings to reinforce long‑term resilience, while still paying out generous dividends and buying back its own shares.

Whether that makes UOB (SGX: U11) a buy for you depends on your priorities: if you’re comfortable trading some growth for resilient income and conservative balance‑sheet management, UOB remains firmly in the conversation.

As always, this article is informational only and not investment advice. Consider your own objectives, risk tolerance and, if needed, speak with a qualified adviser before making any decision.