This is what UOB targets in 2013

It's about regional wholesale banking.

According to DBS, focus in 2013 is on building fee income capabilities and holding up balance sheet strength. UOB will continue to build fee based income leveraging from its regional wholesale banking and wealth management platforms. Loan growth is guided at high single digit for 2013.

Here's more from DBS:

Lifted by dividends and investment gains. 3Q12 net profit was led by higher than expected trading and investment income and a one-off high dividend payment (c. S$50m).

Excluding the one-off high dividend payment, pre-provision profits were ABOVE expectations. Other P/L items were largely in line.

NIM declined as expected; loan growth was stable. NIM declined by 8bps to 1.84% as expected, from both lower asset yields (as the bank trimmed down its securities portfolio) and higher deposit costs (from Thailand, Indonesia, China and Singapore).

Funding costs in Malaysia stabilised. Loans grew 1.8% q-o-q, 8.6% y-o-y, at almost a similar pace as 2Q12, mainly from Singapore housing and other consumer loans. Housing loan growth is likely to remain strong over the next 2 quarters from drawdowns of previously committed accounts.

Management also said that it is too early to assess the impact of the recent property cooling measures.

Higher NPLs. Gross NPL ratio rose to 1.6% due to higher NPLs from the transportation sector related to an account from an overseas branch. The account is still performing but management decided to downgrade the account on the basis of financial weakness.

Provisions were higher as expected; annualized provision charge-off rate remained flat at 30bps.

NIM is likely to remain under pressure (mainly from deposits) for another one to two quarters. Additional NIM pressure may arise from the need to hold more liquid assets in view of meeting Basel III’s liquidity coverage ratio by 2015.

Competition for deposits is likely to remain while there may be a rush to buy more government securities to meet this criterion.