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SINGAPORE - Shares of United Overseas Bank (UOB), Singapore's second-largest lender, fell as much as 2.9 per cent on Friday on concerns the bank may make a rights offer following disappointing fourth quarter results.
UOB's October-December net profit fell a larger-than-expected 34 per cent to $332 million due to higher writedowns for bad debt and lower fees from capital markets.
The bank also cut its dividend to 40 cents from 45 cents a year ago.
A dealer attributed the selling to UOB's poor results, although he added the dividend was 'not too bad'.
JPMorgan, which maintained its 'neutral' rating on UOB, said the shares will remain under pressure due to concerns about a possible rights issue.
'Tier 1 ratio below peers may lead to renewed concerns on capital raising,' the US bank said in a report.
By 0751 GMT, UOB was down 2.9 per cent, underperforming the 1.5 per cent fall in the benchmark Straits Times Index.
UOB shares were up around 1.5 per cent before the midday break when UOB announced its results. -- REUTERS
