UOB - Maybank Research 2024-11-09: Earnings Have Upside Risk, So Has Capital Returns.

• UOB’s 9M24 core-earnings were ahead of MIBG and Street's expectation.

Executing on growth

• It is successfully integrating the Citi acquisition, while showing good execution in leveraging its ASEAN footprint. Investments in technology & higher-for-longer interest rates could drive UOB's EPS upgrades going forward.
• - Read this at SGinvestors.io -

NoII and NII tailwinds could lead to upside risks

• UOB's 3Q24 trading was boosted by the bank’s own trading (2x y-o-y). More importantly, customer flow related trading increased +36% y-o-y.
• - Read this at SGinvestors.io -
• Ongoing spending on digital platforms should help convert more deposits to investments in the next 12-14 months, according to UOB's anagement. We raise 2024-26E NoII forecasts for UOB by 6-17%.
• Similarly, NII could benefit from a slower trajectory of rate cuts under a new Trump Administration. NIMs were flat q-o-q pointing to hedging activities and UOB's management is guiding for stronger loan growth in 2025E driven by digital economy, trade and green lending. These could lead to upgrade risks in NII, in our view.

Some integration hiccups, but not structural

• Read more at SGinvestors.io.

Thilan Wickramasinghe Maybank Research | https://www.maybank.com/ 2024-11-09 SGinvestors.io

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