UOB

UOB: 2Q10 results. Net profit +28% yoy to $602m, boosted by sharp decline in impairment charges, but was down 2.7% qoq, even after adjusting for one-off from sale of UOBLife in 1Q10. Key disappointments were the largest NIM decline among peers (-11bps qoq) and weakest loan growth (+3% qoq). Trading gains were also weaker…

Nevertheless, UOB appears to offer the strongest balance sheet in the sector, and improving asset quality. High unsecured NPL coverage of 209% suggests credit costs should remain low going forward. UOB maintains interim div at $0.2/sh…

KE has a Buy rating, with $22.30 target pegged to 1.8x FY10 PB. Although Deutsche prefers DBS, OCBC due to their higher expected growth and potential upside to target valuations.