Towards Financial Freedom
UOB - A Lift From Lower Impairment Charges
UOB's 2QFY13 net profit hit a new high of SGD784m (+10% y-o-y; +9% q-o-q), beating both our and consensus estimates. The numbers were lifted by lower-than-expected impairment charges. In view of the sustained pace of earnings growth, upgrade in loans growth guidance and NIMs having bottomed, we reiterate our BUY call on UOB, with an upgraded FV of SGD24.40 (from SGD24.20).
- Good 2QFY13 results. UOB saw another record quarter for net profit, with its 2QFY13 net profit of SGD784m (+10% y-o-y; +9% q-o-q) bringing the 1HFY13 earnings to SGD1.5bn (+8% y-o-y). When annualised the 1H net profit was 11% ahead of our and 8% above consensus full-year estimates. While pre-provision operating profit was in line with estimates, credit costs were lower than expected at 30bps vs our 40bps assumption. Contribution from associates/joint ventures were also boosted by lumpy investment gains, but going forward, these gains would not be as significant as those in 2QFY13. UOB declared an interim tax exempt DPS of SGD0.20, similar to 2Q12.
- The highlights. The 2QFY13 positives were: i) net interest income regaining traction (+5% y-o-y; +4% q-o-q); 2) stable NIM q-o-q; 3) quarterly fee income of SGD436m was above the earlier guided normalised run rate of SGD350m-SGD400m/quarter; and 4) improving asset quality and stable credit charge. Pre-provision operating profit, however, was still weak (-6% y-o-y; -3% q-o-q) due to weaker noninterest income levels and negative jaws.
Source: OSK
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
