• Maintain BUY and SGD33.30 Target Price, 25% upside, tied to a long-term ROE assumption of 12.8% (2Q18: 12.1%).
• UOB’s 2Q18 net profit of SGD1.08bn was up 28% y-o-y (+10% q-o-q), whilst NIM of 1.83% was 1bp narrower q-o-q – the growth trend is evident from the 8bps y-o-y widening and management sees future NIM upside. 
• It also sees little impact of the property cooling measures on near-term loan growth and guided for high single-digit 2018 loans expansion.
• UOB’s introduction of a digital bank is also long-term positive.

Strong 2Q18 Earnings

UOB’s 2Q18 net profit was SGD1.08bn, up 10% q-o-q and 28% y-o-y. The key driver was NII, which rose 5% q-o-q and 14% y-o-y.

Source: RHB Invest Research - 03 Aug 2018