Skip to Content

United Overseas Bank Ltd U11

Morningstar Rating
SGD 30.57 +0.34 (1.12%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

UOB Earnings: Higher-for-Longer Interest Rates to Support NIM; Raising Valuation on Cost Efficiency

Narrow-moat United Overseas Bank reported a mild 2% year-on-year drop in first-quarter net profit, beating market consensus on higher noninterest income, but in line with our expectations. Net interest margin is stable quarter on quarter at 2.02%. Management expects to hold NIM above 2% for the rest of the year as interest rates are higher for longer, which should bring net interest income back to growth for the full year, compared with a 2% year-on-year drop in the first quarter. We edged up our 2024 NIM assumption to 2.02% from 2.00%, as we see less pressure on loan yield, and a higher mix of low-cost current and savings account deposits should support NIM in the second and third quarter, before the impact of US Federal Reserve rate cuts comes through in the second half of 2024. This lifts our 2024 net profit growth forecast to 4.7% from 3.0% previously. We also lowered our midcycle cost/income ratio assumption as the bank aims to bring it down to around 40% by 2026. As such, we raise our 2026 earnings forecast by 5% and lift our fair value estimate for UOB to SGD 38 per share from SGD 36.

Price vs Fair Value

U11 is trading at a 162% premium.
Price
SGD 30.23
Fair Value
SGD 77.00
Uncertainty
Medium
1-Star Price
SGD 41.60
5-Star Price
SGD 47.30
Economic Moat
Kjvgmj
Capital Allocation
Fbwqsqmh

Bulls Say, Bears Say

Bulls

UOB, with greater focus on ASEAN and card fees, could find it easier to deliver growth in 2024 and 2025 than some of its peers that are more focused on Greater China and wealth management as a source of fee growth.

Bears

Credit costs are increasing due to exposures such as commercial real estate in the US and risks related to China's property market.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if U11 is a good fit for your portfolio.

News

Trading Information

Previous Close Price
SGD 30.23
Day Range
SGD 30.1630.60
52-Week Range
SGD 26.8231.35
Bid/Ask
SGD 30.56 / SGD 30.57
Market Cap
SGD 51.20 Bil
Volume/Avg
2.2 Mil / 3.5 Mil

Key Statistics

Price/Earnings (Normalized)
9.20
Price/Sales
3.65
Dividend Yield (Trailing)
5.62%
Dividend Yield (Forward)
5.62%
Total Yield
5.91%

Company Profile

United Overseas Bank is a diversified financial institution based in Singapore. Its regional reach spans Greater China and Southeast Asia. Key countries include Malaysia, Thailand, and Indonesia. Singapore, its core market, makes up around 50% of its total assets. The group offers a wide range of services, including consumer, commercial and corporate, and investment banking; corporate finance; treasury services; and wealth management, insurance, and brokerage services.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
32,338

Competitors

Valuation

Metric
U11
O39
D05
Price/Earnings (Normalized)
9.209.158.79
Price/Book Value
1.161.171.59
Price/Sales
3.654.724.88
Price/Cash Flow
7.918.888.99
Price/Earnings
U11
O39
D05

Financial Strength

Metric
U11
O39
D05
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
U11
O39
D05
Return on Assets (Normalized)
1.19%1.13%1.38%
Return on Equity (Normalized)
14.41%12.41%17.20%
Return on Invested Capital (Normalized)
Return on Assets
U11
O39
D05
See how this stock stacks up to its competitors with Morningstar Investor

Banks - Regional Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
BNPQY
BNP Paribas ADRBhrvvfzQbs$82.9 Bil
ISNPY
Intesa Sanpaolo ADRWpkmzbbzVhxj$70.4 Bil
USB
U.S. BancorpWtfdwvfnrMyvf$63.6 Bil
PNC
PNC Financial Services Group IncKvxnvrjxDvjtxb$62.3 Bil
ITUB
Itau Unibanco Holding SA ADRRvljpklWkjz$58.8 Bil
TFC
Truist Financial CorpJwxgphjxVhvskbd$52.9 Bil
MFG
Mizuho Financial Group Inc ADRFpsgxtjcsVlrt$50.7 Bil
LYG
Lloyds Banking Group PLC ADRLzpqmnfdRwlbk$45.0 Bil
NWG
NatWest Group PLC ADRXddkMggds$35.2 Bil
DB
Deutsche Bank AGFcwhsRxsk$33.2 Bil

Sponsor Center