Downgrade UOB to NEUTRAL from ACCUMULATE with a lower target price of S$34.60 (previously S$36.30) as we lower FY25e earnings by ~4% from lower NII and fee income estimates.
- Read this at SGinvestors.io -
NII dipped 3% from NIM compression of 14bps, while fee income rose by 3% y-o-y. Allowances up 20% from higher SPs, mitigated by pre-emptive provisions. UOB has provided FY25e guidance for NIM of 1.85-1.90%, low-single digit loan growth, high-single digit fee income, and credit costs at around 25-30bps from a top-up in GP buffer. We expect FY25e earnings to decline by ~4% as margin compression continues.
The Positive
Non-interest income is the only positive.
- Read this at SGinvestors.io -
Other non-interest income grew 8% y-o-y and was supported by higher customer-related treasury income and improved trading and liquidity management performance. Overall, non-interest income rose by 5% y-o-y.
The Negatives
NII declines from NIM compression.
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/.
Use Trust Referral Code PGKPSWAE to sign up NTUC Link or Trust Link Credit Card or open a Trust Bank savings account this December: ✨Earn up to S$1,000 cashback reward 🎟 and win an XPENG G6 SUV 🚙 !
