UOB - UOB kept at Neutral by Credit Suisse with $23.00 target

Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD
Research House: Credit Suisse

Credit Suisse says UOB (U11.SG) 3Q10 core net profit of $688 million ahead of estimates. Likes that bank maintained market share in Singapore mortgage loans, gained in Malaysia; deposits increased nicely, by 5.4% on-quarter, says Dow Jones.



But says bank continues to lose overall loan market share in Singapore; NIM pressure more than expected; NPLs saw first increase since 2Q09, but from non-core OECD market.

“Looking forward, UOB should continue to be the most conservative among peers on loan growth, with growth mainly from overseas. Margin pressure expected to continue near term. We expect cost pressure as war for talent pushes up staff costs.”



Cuts 2011/12 EPS estimates by 5.0%-6.0%, driven by lower margins. “UOB remains the best ROE bank in Singapore and valuations are starting to look attractive, but the stock lacks catalysts.” Maintains $23.00 target price, Neutral rating. Shares down 0.1% at $18.62.