UOB's Singapore loan growth at risk of slipping from 10%

To just mid-single digits.

According to Nomura, their full-year net profit forecast of SGD2.69bn implies an average of SGD670mn per quarter. "We have forecast a loan growth of 10%, led by the group’s core Asean markets of Malaysia, Indonesia and Thailand," Nomura said in a report.

However, loan growth in Singapore may ease to mid-single digits, down from 10% in FY12.

Here's more from Nomura:

We expect NIM to trend slightly lower to 1.71% from 1.72%, as the stronger growth in the higher margin markets should cushion the weak Singapore margins.

We believe credit cost will remain relatively stable at 34bp (FY12: 32bp) – last year’s spike in individual impairments was offset by a release from the general provision reserve.

Management expects loan growth to be in the high single-digits and margins to remain under pressure. As for non-interest income, management continues to see good traction in the wealth management business, largely driven by the second-tier, high-net-worth clients with investible assets of SGD350K-2mn.

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