UOB released its 1Q17 results this morning. Net earnings came in at S$807m, up 5.4% YoY or 9.3% QoQ. This is also better than market expectations of S$757m as polled by Bloomberg. UOB experienced both higher Net Interest Income as well as Non-interest Income, up 2.2% QoQ and 8.8% QoQ, respectively.

On the Noninterest Income, this came largely from the strong increase in Net trading income, up 59% YoY and 55% QoQ, to S$261m. Allowances remained elevated at S$186m this quarter versus S$131m last quarter and S$117m in 1Q16. NPL ratio remained stable from last quarter at 1.5%.

Overall, its 1Q results showed good improvement over the previous quarter. We will provide more information, review our earnings estimates, fair value and rating after the analysts’ briefing.

We had a HOLD rating before the 1Q17 results..

Source: OCBC Research - 28 Apr 2017