Stock Name: UOB
Company Name: UNITED OVERSEAS BANK LTD
Nomura Research in a Nov 2 research report says: "UOB declared 3Q earnings of $522 million (-18% q-o-q), 5-10% below Nomura and consensus expectations on an annualised basis.
"Key P&L drags were at the operating income level (-5% q-o-q, compared to +7% q-o-q for DBS) on (i) flat net interest income q-o-q despite +7% q-o-q loan growth as NIM contracted 3bps q-o-q; and (ii) 15% q-o-q contraction in non-interest income.
"Other P&L line items were within expectations but underlying ratios were less impressive-ie, cost-income ratio jumped to 46% while loan loss reserve fell to 133% as absolute NPLs inched up.
"Core equity ratio was a sector-leading 12.3%. Our Gordon growth based price target is 21.90 or 1.7x FY11F adjusted book value,13x FY11F earnings. NEUTRAL."
Company Name: UNITED OVERSEAS BANK LTD
| Research House: Nomura | Price Call: HOLD | Target Price: 21.90 |
Nomura Research in a Nov 2 research report says: "UOB declared 3Q earnings of $522 million (-18% q-o-q), 5-10% below Nomura and consensus expectations on an annualised basis.
"Key P&L drags were at the operating income level (-5% q-o-q, compared to +7% q-o-q for DBS) on (i) flat net interest income q-o-q despite +7% q-o-q loan growth as NIM contracted 3bps q-o-q; and (ii) 15% q-o-q contraction in non-interest income.
"Other P&L line items were within expectations but underlying ratios were less impressive-ie, cost-income ratio jumped to 46% while loan loss reserve fell to 133% as absolute NPLs inched up.
"Core equity ratio was a sector-leading 12.3%. Our Gordon growth based price target is 21.90 or 1.7x FY11F adjusted book value,13x FY11F earnings. NEUTRAL."
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