UOB - DBS Research 2024-04-22: More Upside In The Works

UOB - More Upside In The Works

UOB (SGX:U11) | SGinvestors.ioUOB (SGX:U11)
  • We believe UOB (SGX:U11) will reverse the q-o-q NIM decline and show stable NIMs for 1Q24.

Active management of deposit costs.

  • While 4Q23 NIM saw a sharper q-o-q contraction of 7bps on loan yields due to competition for high-quality credit, UOB’s active management of deposit costs can buffer its earnings going forward.
  • - Read this at SGinvestors.io -
  • While there are higher yielding alternatives such as T-Bills and Singapore Savings Bonds, management is ready to let go of some excess liquidity that has been weighing on NIM in previous quarters.

Less or no rate cuts may provide upside to earnings.

  • - Read this at SGinvestors.io -
  • We estimate that every 100bps change in the interest rate that affects UOB’s major currencies will impact net interest income (NII) by ~S$70m on an annualised basis during FY24F, based on our sensitivity analysis. We believe the current valuations have not priced in a scenario of no rate cuts through FY24F.

Asset quality continues to remain stable thus far.

  • Read more at SGinvestors.io.

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.

Rui Wen LIM DBS Group Research | https://www.dbs.com/insightsdirect/ 2024-04-22

Read also DBS's most recent report:
2024-05-08 UOB - NIM Has Stabilised.

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 Dividends & Corporate Actions,
UOB News Articles


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