UOB’s Resilience and Growth Potential Amid Economic Challenges: A Buy Rating

UOB (UOVEF – Research Report), the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Wee Kuang Tay from CGS-CIMB reiterated a Buy rating on the stock and has a S$38.60 price target.

Wee Kuang Tay’s rating is based on a combination of factors that highlight UOB’s resilience and potential for growth despite current economic challenges. The bank’s net interest margins (NIMs) have remained relatively stable, supported by an increasing CASA ratio and effective deposit management strategies. Additionally, UOB’s loan book has shown growth, and the bank has taken proactive steps to manage funding costs, which positions it well to handle potential margin pressures.
Furthermore, UOB’s exposure to ASEAN and Greater China markets provides a buffer against the direct impacts of US trade tariffs, as only a small portion of its loan book is directly affected. Although there are concerns about potential second-order impacts from global trade tensions, UOB has strengthened its provision coverage to mitigate risks. These factors, combined with the potential for increased trade flows within ASEAN and a robust capital distribution plan, contribute to the optimistic outlook and the Buy rating.

According to TipRanks, Kuang Tay is a 2-star analyst with an average return of 0.3% and a 42.11% success rate.