Guess which bank is most exposed to Singapore mortgage repricing

Mortgages are 23-24% of gross loans.

According to Macquarie Equities Research, it sees UOB as most exposed of the big three banks to Singapore mortgage repricing. Macquarie believes this will continue to pressure yields into 2014E.

"The banks don’t disclose their Singapore mortgage book, but we estimate UOB’s mortgages are 23-24% of gross loans, higher than our estimates for its peers. We forecast NIM to fall to 1.7% for 2013, down 17bps YoY and to remain near trough levels in 2014-15E," said Macquarie.

Here's more:

UOB is delivering reasonably strong PPoP growth despite the macro pressures. We still see this as a very solid bank with a (slowly) expanding presence in ASEAN. The 3% yield may still attract some investors, and we believe the dividend is sustainable given the balance sheet strength.

The stock is trading on 1.4x P/BV, which we see as close to fair value given the 11-12% ROE outlook. The stock has performed well YTD and exceeded our target price. With limited further upside catalysts and an overtly negative house strategy call on Singapore, we believe a Neutral call is justified.

UOB is our default top pick for investors seeking exposure to the Singapore banks. The operational improvements and consistently strong PPoP and earnings delivered by DBS leave us more impressed, but the risks of getting bogged down in a (full? partial?) acquisition of Danamon tilt our favour to UOB.

In our view, UOB is a structurally simple bank-centric group with slow organic growth in ASEAN – and this offers better risk/reward, in our view.

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia