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CGS-CIMB keeps UOB as top bank sector pick despite underperforming NIM expansion

Stanislaus Jude Chan
Stanislaus Jude Chan6/3/2019 12:26 PM GMT+08  • 3 min read
CGS-CIMB keeps UOB as top bank sector pick despite underperforming NIM expansion
SINGAPORE (June 3): CGS-CIMB Research is keeping United Overseas Bank (UOB) as its top pick among the Singapore banks, despite the bank’s NIM expansion underperforming compared to its peers.
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SINGAPORE (June 3): CGS-CIMB Research is keeping United Overseas Bank (UOB) as its top pick among the Singapore banks, despite the bank’s NIM expansion underperforming compared to its peers.

According to lead analyst Andrea Choong, UOB’s valuations are inexpensive at 1.0 times FY19F price-to-book value (P/BV) – close to 1 standard deviation below its long-term mean. The bank also offers a FY19F dividend yield of 5.1%.

“UOB’s 1Q19 loan growth was the strongest amongst peers at +3.0% q-o-q. However, NIM expansion has underperformed its peers, having contracted for four consecutive quarters,” she adds.

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