{"id":17459,"date":"2024-07-19T07:00:35","date_gmt":"2024-07-18T23:00:35","guid":{"rendered":"https:\/\/www.smallcapasia.com\/?p=17459"},"modified":"2026-06-08T19:31:13","modified_gmt":"2026-06-08T11:31:13","slug":"united-overseas-bank-steady-delivery","status":"publish","type":"post","link":"https:\/\/www.smallcapasia.com\/zh-hant\/united-overseas-bank-steady-delivery\/","title":{"rendered":"United Overseas Bank &#8211; Steady delivery"},"content":{"rendered":"<p><em>Excerpts from Maybank report<\/em><\/p>\n<h2>United Overseas Bank (SGX: U11)<\/h2>\n<ul>\n<li>United Overseas Bank 1Q24 core-earnings were marginally ahead of MIBG\/Street expectations. This was bolstered by trading income which is volatile.<\/li>\n<li>Operationally, we see slower growth for NII led by peaking loan yields and slow loan growth. Wealth management is a bright spot that needs to be watched as well as higher for longer interest rates keeping NIMs supported.<\/li>\n<li>Amidst slower growth, we see limited prospects for dividend surprises in the near term.<\/li>\n<\/ul>\n<p>Raise TP to SGD31.03. Maintain HOLD.<\/p>\n<h2>Upside to fees. Trading gains volatile<\/h2>\n<p>Trading related income jumped +32% QoQ led by United Overseas Bank own trading and liquidity management activities. Management claims the current run rate is sustainable for the rest of the year.<\/p>\n<p>While we upgrade 2024E NoII by 3% to reflect this, visibility of this sustaining is limited, in our view. Fees gained slight momentum +2% QoQ driven by a pick in wealth management.<\/p>\n<p>The Group is strategizing to move more clients towards higher fee wealth products from fixed deposits going forward, which bodes well for further growth in this segment.<\/p>\n<p>Credit card contribution to total fees was 15.5% vs. 15% a year ago, showing limited gains from lifestyle activities such as partnering the Taylor Swift concerts.<\/p>\n<h2>NII growth limited. Asset quality to remain supported<\/h2>\n<p>NII fell -2% YoY and QoQ. Some of this is due to a shorter quarter from CNY holidays, but NIMs also fell -12bps YoY and flat QoQ. While the funding mix has improved with CASA rising to 50.6% (vs. 48.9% 4Q23), this did not seem to be enough to offset peaking loan yields.<\/p>\n<p>Loans have grown at 2% YoY largely in North Asia and RoW. Management is guiding for low, single digit growth for 2024E pointing to limited demand in this high rate environment.<\/p>\n<p>A higher for longer rate environment is likely to keep loan growth in check, although we are watching for upgrade opportunities to margins going forward.<\/p>\n<p>Asset quality, on the other hand, remains stable (NPLs flat at 1.5% QoQ), while limited systemic risks are observed.<\/p>\n<h2>Valuation\/Recommendation<\/h2>\n<p>Management is unlikely to review its 50% dividend payout guidance in the near-term. We also note a CET1 of 13.9%, while high, is not excessive especially amidst current uncertainty.<\/p>\n<p>As a result, we see limited upside to dividend upgrades or special dividends going forward. Post results, we raise 2024-25E EPS by 1-2%. Our multi-stage DDM (COE 9.1%, 3% terminal) TP to SGD31.03 from SGD30.88. Maintain HOLD<\/p>\n<figure id=\"attachment_17460\" aria-describedby=\"caption-attachment-17460\" style=\"width: 1512px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/07\/UOB-share-price.jpg\"><img fetchpriority=\"high\" decoding=\"async\" class=\"size-full wp-image-17460\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/07\/UOB-share-price.jpg\" alt=\"United Overseas Bank share price chart\" width=\"1512\" height=\"502\" \/><\/a><figcaption id=\"caption-attachment-17460\" class=\"wp-caption-text\">United Overseas Bank share price chart<\/figcaption><\/figure>\n<p>You can find the full report <a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/07\/UOB.pdf\"><em>here<\/em><\/a> and the bank website <em><a href=\"https:\/\/www.uobgroup.com\/investor-relations\/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">here.\u00a0<\/a><\/em><\/p>\n<p>[thrive_leads id=&#8217;15712&#8242;]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Excerpts from Maybank report United Overseas Bank (SGX: U11) United Overseas Bank 1Q24 core-earnings were marginally ahead of MIBG\/Street expectations. This was bolstered by trading income which is volatile. Operationally, we see slower growth for NII led by peaking loan yields and slow loan growth. Wealth management is a bright spot that needs to be [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":17462,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[3052,3051],"tags":[881,1331,1943,2719,2837,2841,2842,2843],"class_list":["post-17459","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-exchange-listed-companies-singapore","category-singapore","tag-singapore-stocks","tag-singapore-stocks-to-buy","tag-singapore-stocks-ideas","tag-banking-stocks","tag-bank-stocks","tag-united-overseas-bank","tag-united-overseas-bank-share-price-chart","tag-banking-stocks-singapore"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/posts\/17459","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/comments?post=17459"}],"version-history":[{"count":2,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/posts\/17459\/revisions"}],"predecessor-version":[{"id":17464,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/posts\/17459\/revisions\/17464"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/media\/17462"}],"wp:attachment":[{"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/media?parent=17459"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/categories?post=17459"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/tags?post=17459"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}