OCBC: UBS downgraded OCBC to Sell and reduced TP to $10.10 (from $11.00), citing that OCBC's CET1 capital ratio is running well below peers and there is a perceived lack of clear focus on capital.
OCBC's 1Q results were ahead of expectations but the quality was fairly low. Key drivers were strong trading gains in a seasonally strong quarter and a very low loan impairment charge. The latter just looks very low in the current environment and should be a cause of concern - another reason for the downgrade. The total provision buffer, at 1.08% of gross loans, is the lowest among peers.
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