UOB (SGX:U11)'s 1Q23 adjusted earnings of S$1,577mil were slightly above our estimates due to higher other non-interest income and lower allowances offset by lower-than-expected NII growth. 1Q23 adjusted PATMI was 28% of our FY22e forecast.
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UOB's management has lowered its loan growth guidance from mid-single digit to low to mid-single digit, while maintaining its guidance of NIMs at around 2.1-2.2%, double-digit fee income growth, stable cost-to-income ratio and credit costs at 20- 25bps for FY23e.
Maintain BUY rating on UOB with an unchanged target price of S$35.70.
The Positives
Fee income recovery on track, 14% q-o-q growth.
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Nonetheless, fee income saw its first q-o-q increase in four quarters, rising 14% q-o-q largely due to a recovery in wealth management fees of 27% q-o-q as investor sentiments started to improve.
Likewise, loan-related fees rebounded 14% q-o-q, while credit card fees sustained its momentum despite seasonally softer quarter.
Other non-interest income surged in 1Q23.
Read more at SGinvestors.io.
Above is an excerpt from a report by Phillip Securities Research. Clients of Phillip Capital may be the first to access the full PDF report @ https://www.stocksbnb.com/.
