UOB (United Overseas Bank)

[Big Toe]

Interesting reaction to the results.
My best guess is that while the YoY results looked good, the net interest margin dipped slightly even though the YoY trend remained good.
Any experts here can comment? I think most people were expecting NIM to expand.

[kbl]

Interesting reaction to the results.
My best guess is that while the YoY results looked good, the net interest margin dipped slightly even though the YoY trend remained good.
Any experts here can comment? I think most people were expecting NIM to expand.

Good friday afternoon Big Toe san and All.

3q18 vs 2q18 4% lower.

3Q18 versus 2Q18 Compared with the previous quarter, net earnings for the quarter were 4% lower at S$1.04 billion, as credit costs rose marginally, while total income and expenses were stable despite intensifying macro headwinds. Net interest income grew 4% to S$1.60 billion. With the expectation of further interest rate increases, the Group built up deposits during the quarter to ensure that its funding position remains well placed to meet projected business growth. This resulted in a slight dip in net interest margin to 1.81% for the quarter. Net fee and commission income decreased 3% to S$484 million on the back of lower loan-related and fund management fees. Other non-interest income declined 19% quarter on quarter, mainly due to lower gains from structural foreign exchange positions. Total expenses declined 1% to S$1.01 billion in line with lower operating income, resulting in a slight improvement in cost-to-income ratio to 43.4% for the quarter. Total allowances increased by S$5 million to S$95 million, with credit costs on impaired loans rising to 15 basis points for the quarter

http://infopub.sgx.com/FileOpen/3Q18%20N...eID=530886

Not a call to Buy or Sell. Vested Oldpot.

[Big Toe]

Thanks kbl, was not diligent enough on my part to look through everything.
So the build up of deposit base causing NIM to dip and the increase in allowance triggered the selling.

[jfc18]

Everyone will point the fingers at the minute dip in NIM and poorer QonQ earnings. In this volatile market, investors will make full use of any excuse to sell down. At current price of $24, UOB is trading at ard 1.15 book. During the Oil and Gas implosion not long ago, all the Big 3 traded below book value.

UOB has stated that it will give out 50% of earnings as dividends. So most likely to be $1.10 to $1.20, which translates to 4.5% to 5% yield. Consensus is that the dividend will somewhat support the share price. However, imho, PTB is the all impt metric that the market is looking at, since earnings can drop should the global economy slow down. In this case, all our local banks still have some leg to fall if market wants them to trade below book. Will defo scope them up if this happens.

Vested in all Big 3.

[theasiareport]

Working on a series of articles that teach investors how to run through the financials of banks which work quite differently from normal companies.

Singapore Bank Series (UOB,OCBC,DBS) How do banks really make money? 

[Behappyalways]

Singapore’s United Overseas Bank (UOB) wants to sell its 13 per cent stake in HengFeng, which it bought in 2008, according to a report by Bloomberg earlier this year. UOB, the second largest shareholder of HengFeng, said it planned to deploy capital by increasing the number of its own branches in mainland China.

Unit of China’s sovereign wealth fund takes over Xiao Jianhua-linked HengFeng Bank in third case of nationalisation since May
https://www.scmp.com/business/banking-fi...ao-jianhua

[blackclock]

For every drop of 0.25% interest rate, could any expert here advise how much the NIM will drop?
Thank you

[dreamybear]

So this is what happens at a private bank - recommend clients to invest in funds like Bridgewater.

According to a seedly website, to qualify for UOB Private Banking, requirement of AUM of $2-3 million.
https://blog.seedly.sg/the-world-of-luxury-banking/

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Dalio’s Bridgewater Falls Out of Favor at UOB Private Bank
December 3, 2019

.....UOB Private Bank, a unit of Southeast Asia’s third-largest lender, recommended around mid-year that clients pull their money from Bridgewater, Chief Investment Officer Neo Teng Hwee said.

“The one that has not done really well for us is Bridgewater,” Neo said in an interview Tuesday. “Previously we used to like it and it was high conviction, but now we’ve removed them from high conviction.”.....

https://finance.yahoo.com/news/dalio-bri...56454.html

[cyclone]

Entry Into Subscription Agreement with Hengfeng Bank Co., Ltd, China

United Overseas Bank Limited ("UOB") announced that it has today signed a Subscription Agreement to subscribe for 1,861,400,000 shares of RMB1.00 each in Hengfeng Bank Co., Ltd, China 恒丰银行股份有限公司 ("HFB"), a joint-stock bank with a country-wide banking licence.

The Subscription is part of a capital increase exercise (“Capital Increase”) undertaken by HFB through private placement to existing and new investors to raise RMB100 billion. Central Huijin Investment Limited and Shandong Financial Asset Management Co., Ltd. will subscribe for a total of approximately 96 billion shares in the Capital Increase to become controlling shareholders of HFB. The Capital Increase and Subscription are subject to, inter alia, approval by the China Banking and Insurance Regulatory Commission.

Following the Capital Increase and Subscription, UOB will hold a total of 3,336,360,308 shares in HFB. UOB intends to fund the Subscription of RMB1,861,400,000 (equivalent to approximately S$360 million) in cash using its internal resources. The Subscription is not expected to have a material impact on earnings or the net tangible assets of UOB Group for the current financial year.

More details in https://links.sgx.com/FileOpen/UOB-A2019...eID=590866

[Behappyalways]

Hengfeng Bank ex-chairman sentenced to death with two-year reprieve
https://sg.finance.yahoo.com/news/hengfe...18180.html