UOB's ROE to outperform peers in 1Q17: analyst

But core net profit is seen to grow only 3%.

CIMB analysts expect UOB’s core ROE to outperform peers in 1Q17, as provisions are most likely to be kept in line with its usual 32bp credit costs as it still has a GP buffer to tap on (GP/loans of 1.2%), which will allow it to do further GP writebacks to offset residual SPs for oil & gas accounts. 

"While we expect core net profit growth of only 3% qoq and flat yoy to S$765m, the prior two periods have a high base effect as credit costs were lower at 22-24bps. Key points to look out for include: 1) higher securities yields with deployment of excess liquidity into higher-yielding assets, 2) better trading income with a pickup in sentiment in 1Q17, 3) steady operating expenses, and 4) absence of associates losses that were seen in both 1Q16 and 4Q16."