UOB - CGS-CIMB Research 2024-02-22: Steady Earnings In 4Q23; Prioritising Funding Cost Reduction

• UOB (SGX:U11) recorded 4Q23 core net profit of S$1.5bn (adjusted for one-off Citi integration costs; +1% q-o-q, +7% y-o-y). The adjusted core net profit was in line with our and Bloomberg consensus estimates.
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Key highlights

• UOB's net-interst margin (NIM) declined a steeper 7bp q-o-q to 2.02% in 4Q23 (vs our -3bp estimate) due to increased competition for high-quality credit (vs. our -3bp q-o-q estimate). Full-year NIM came to 2.09% (FY22: 1.86%).
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• Excluding Citi one-off integration costs, CTI stood at 43.2% in 4Q23 (3Q23: 41%). Full-year CTI (same basis) stood at 41.5% in FY23 (FY22: 43.4%).
• Credit costs came up to 25bp in 4Q23 as specific allowances moderated. Full-year FY23 credit costs stood at 25bp, which was within management’s guidance.

2024F outlook updates from UOB management

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Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.

Previous report by CGS-CIMB:
2023-10-27 UOB - Going Defensive; 3Q23 Softer NIM Offset By Fees.

Price targets by 4 other brokers at UOB Target Prices.

Listing of research reports at UOB Analyst Reports.

Relevant links:
UOB Share Price History,
UOB Announcements,
UOB Dividend Payout Dates & Corporate Actions,
UOB News