UOB

UOB: It expects further increase in Net Interest Margin (NIM) as only about 2/3 of its loan book had been repriced in 1Q. NIM was up 7bp q-q in 1QFY15. 90% of its SG loans are floating and it estimates that for every 25bp increase in short term I/R, NIM could increase by 3-4bp.

Loan growth for 2015 expected to be around 5%, driven primarily by SG and MY. Indonesia is likely to be challenging given the slowdown of the economy.
The newly launched Singapore Savings Bonds (SSB) could lead to competition in deposits, as some money is diverted to SSBs. However, it is unlikely to lead to a significant increase in deposit rates as the total investment/pax is limited to $100,000.

UOB believes long term fundamentals underpinning SEA economies remain intact. These fundamentals are: significantly higher levels of foreign reserves, healthier current account and balance of payment positions, lower level of corporate leverage and lower foreign currency debt.

The house maintains a BUY rating with TP: S28.10, a 23% upside from current share price ($22.93).