DMG puts United Overseas Bank (U11.SG) target price, currently at $21.50, under review, will be reviewing Buy recommendation, earnings estimates; says 3Q results above expectations though net profit growth largely driven by other operating income, which almost tripled on-year, up more than 5X on-quarter. “However, net interest income remains lackluster.” 

Adds, other operating income on higher trading and investment income; segment on “available for sale assets” recorded 3Q10 gains of $103 million, almost 5X 2Q10’s $22 million. But fee, commission income flat sequentially. 

 

Also says, NIM squeeze offset benefits from loan expansion; “whilst UOB recorded a sequential net loan growth of 3.2%, the benefits were offset by NIM narrowing 7 bps sequentially to 2.07%. Loan growth was primarily driven by housing loans, which registered a 5.0% on-quarter increase.” 

 

Shares down 0.6% at $18.60, 2 cents above midday price before results.