UOB

UOB: From the recent DB Asia Conference 2013 after UOB reported robust 1Q13 loan growth of 7% q/q boosted by one-off benefits related to M&A financing and underlying growth was 3.5% q/q, more consistent with the bank's 2013 guidance for high-single digit growth but still implying upside risk. And like peers, UOB pointed to broad improvement in corporate loan demand, with China customers' appetite for trade finance clearly getting better post-new year. DB expect UOB to update 2013 loan growth guidance at its next quarterly result. The trends noted above suggest an upgrade to guidance is likely. UOB suggested NIM pressures were likely to persist for a few more quarters. DB are forecasting a 2013 NIM broadly in line with the 1.70% reported in 1Q13, implying potential downside to its estimates, although house see steepening yield curves as a potential source of support. Key margin headwinds flagged by UOB were mortgage backbook re-pricing, and tighter corporate loan spreads. Funding pressures have become less of a concern following recent changes to Basel III liquidity requirements. DB maintains HOLD, TP of $23.00.