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United Overseas Bank Ltd U11

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United Overseas Bank's First Quarter Stronger on Fee and Trading Income

Michael Wu, CAIA Senior Equity Analyst

Analyst Note

| Michael Wu, CAIA |

In line with peers, it was a positive quarter for United Overseas Bank with net profit increasing 18% against the same period last year, to SGD 1 billion. While much of this was driven by a decline in credit cost, or ECL, UOB was able to increase income against last year. Net fee income and trading income were strong at SGD 638 million and more than offset lower net interest income. We increase our fee income assumption to 9% for fiscal 2021 with our fair value estimate rising to SGD 29 per share from SGD 28 per share. The 3-star bank is trading at a 10% discount to our new fair value.

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Company Profile

Business Description

United Overseas Bank is a diversified financial institution based in Singapore with regional reach spanning Greater China and Southeast Asia. Key countries are mainly in Malaysia, Thailand, and Indonesia. Singapore is its core market, making up around 60% of 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.

80 Raffles Place, UOB Plaza
Singapore, 048624, Singapore
T +65 62222121
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2021
Stock Type
Employees 26,000

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