Even after United Overseas Bank’s (UOB) share price gained over 10% in November, DBS Group Research analyst Lim Rui Wen believes there is further room for the counter to grow amid expectations of a gradual pick-up in the economy.

“[UOB’s] strong non-performing asset (NPA) coverage of 111% (2QFY2020: 96%) and ongoing provisioning (management guides for S$2-3bn through FY2020-2021F) will limit downside risks. Management has guided for better-than-expected asset quality outlook during 3QFY2020 results briefing,” she notes in a company update dated Nov 24.

Despite UOB’s dividend cut, Lim still views its yield of 4% “relatively attractive” with the bank’s management indicating its willingness to revert to its FY2019 dividend policy.

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