UOB to suffer 5% profit dip to $662m

Net interest income is still weak.

According to CIMB, they expect UOB to report 1Q13 net profit of S$662m (down 5% qoq, in line with consensus). UOB 4Q12 results had a similar tone to peers – margins were still on a downward trajectory, NII was weak and revenue was supported by strong non-interest income. 

CIMB believes the same revenue profile is likely to repeat in the quarters ahead. UOB continues to articulate its ASEAN trade flow story.

Here's more from CIMB:

UOB already generates more than 40% of its earnings ex-Singapore and aims to hit 50% by 2015.

A key enabler for earning such fees is its complete ASEAN network. A key competitive advantage (vs. regional peers) is its Thailand presence.

Management reckons that UOB captured more than 50% of the FDI inflows into ASEAN the past two years. Meanwhile, Thai corporates aggressiveness in M&As over the past year also opens up investment banking opportunities for UOB.