UOB (U11.SG) surrenders gains, off 0.7% at $19.38 vs +0.4% at $19.60 midday, as 2Q10 results fail to impress, reports Dow Jones.

While net profit in line with expectations, +27.9% on year at S$602 million, result driven by lower bad debt charges rather than improvement in margins or non-interest income. “Quality was poor and, at least in the near term, we expect better share price performance from domestic peers,” says Deutsche Bank.

UOB cites 11-bp sequential fall in net interest margin, steepest decline among Singapore banks, as biggest disappointment. Keeps Buy call, $22.80 target pending results briefing due after market close. With price now below morning low of $19.40, next support tipped at July low of $19.18.