UNITED OVERSEAS BANK LTD
U11.SI
UOB - Wider 2Q17 NIM & Continued Balance Sheet Strength
- UOB’s 2Q17 results were in line with expectations. 1H17 net profit accounted for 50% of ours and consensus full-year expectations.
- 2Q17 positives include slightly wider NIM (up 2bps QoQ to 1.75%), stable asset quality with NPL ratio unchanged sequentially at 1.5%, high GP-loan ratio of 1.2% (vs 1.1% average for the other two banks), and robust 113% loan loss coverage (102% average for the other two banks).
- We will review our earnings forecasts and TP after the analyst briefing to be held later today.
UOB released its 2Q17 results this morning.
- Highlights for 2Q17 include:
- 2Q17 net profit of SGD845m was 5% higher YoY, and also 5% higher QoQ. 1H17 net profit of SGD1,652m represented 50% of EFASynopsis2 both ours and consensus 2017 net profit forecasts of SGD3.33bn & SGD3.28bn respectively. We rate the results as in line;
- 2Q17 net interest margin (NIM) of 1.75% was 2bps wider QoQ, and 7bps wider YoY;
- 2Q17 non-interest income rose 1% QoQ, and accounted for a 38% share of total income;
- 2Q17 overall credit cost of 32bps was the same as 1Q17. Total allowances fell 3% QoQ to SGD180m, and 1H17 provisions of SGD366m represented 52% of our FY17 provisions expectations. 2Q17 specific credit cost of 30bps was down from 1Q17’s 49bps, which is a major positive. NPL ratio of 1.5% was unchanged QoQ;
- 2Q17 loans contracted 0.6% QoQ. The drag came from USD loans which contracted 10% QoQ, and accounted for a 19% share of loans. Overall loans however expanded 7% YoY.
- More highlights after the analyst briefing to be held later today.
Leng Seng Choon CFA
RHB Invest
|
http://www.rhbinvest.com.sg/
2017-07-28
RHB Invest
SGX Stock
Analyst Report
25.950
Same
25.950
