UOB

UOB: CIMB upgrades to Outperform after the stock’s slight underperformance post 4Q11 results, but keeps TP at $19.42. Sees the following catalysts,
i) better 1Q12 margins – ground checks suggest that spreads for large corporates are now 160-180 bps above cost of funds vs 70-80 bps nine mths ago.
ii) strong funding position – rapid build-up of USD deposits allows UOB to participate in lending opportunities from trade finance and regional infrastructure projects.
iii) no more EU debt-related losses – UOB’s $2.3b EU bank debt portfolio (4Q10) has been whittled down to $0.6b (4Q11), suggesting that UOB could surprise on both trading gains and lower provisions in 1Q12.