Is UOB's growth story still intact after its steep share price slip?

It suffered after unveiling its results.

UOB has suffered a steep share price slip since unveiling its results in late April.

According to OCBC Investment Research, the stock has declined by 9.8% to a recent low of $22.60 since it touched a recent high of $25.05 in late April.

Although UOB's outlook remains challenging, OCBC believes that modest growth is still attainable within the year.

"Recent price weakness has opened up opportunities as we see value emerging. We are projecting earnings compounded annual growth rate (CAGR) of 6% from FY14-FY16 for UOB. Although we are expecting costs to go up, bringing cost-income ratio from the current level of 42% to about 44% by FY16, this will be absorbed by income growth as well as a projected decline in impairment charges in FY16, down from the recent peak of S$635m in FY14. At current price of S$22.80, valuations are not demanding at 1.2x book, 11.0x FY15 earnings and with a dividend yield of 3.3%,” said the report.

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