UOB: DMG recommends Buy with $22.00 TP. Bank remains as House top pick. Note that bank raising Lower Tier 2 Capital, and UOB will issue S$1b of 3.45% subordinated notes, which qualify as Lower Tier 2 capital, raising its proforma Dec 10 total CAR of 19.8% by 0.9 ppt. Continue to recommend Buy on UOB given management’s more aggressive stance on loan growth….
Add that bank continues to trade at a low FY11 P/B of 1.4x, a discount to its historical average of 1.6x, and also lower than its peer OCBC’s 1.5x, backed by its more aggressive loan growth stance