SINGAPORE, March 02 (Reuters) - Shares of United Overseas
Bank <UOBH.SI>, Singapore's second-largest lender, fell six
percent to a six-year low on Monday after brokers cut their price
targets for the bank following last week's poor earnings result.
Credit Suisse downgraded its rating on the bank to "neutral"
from its previous "outperform" and cut its target price to
S$12.00 from S$14.75.
"The analyst briefing gave us the impression that UOB is
taking a more bearish view among the three (Singapore) banks,
recognising NPLs (non-performing loans) faster, providing
conservatively and acting to avoid a dilution," Credit Suisse
analysts said.
JP Morgan cut its price target to S$13.00 from S$15.00,
largely citing UOB's lower book value due to mark-to-market
losses on its portfolio of securities. The broker said it prefers
DBS <DBSM.SI>, Southeast Asia's biggest bank, over UOB.
JP Morgan maintained its "neutral" rating for UOB in a report
on Monday and forecast a 42 percent year-on-year decline in the
bank's 2009 net profit.
UOB's fourth quarter net profit fell a larger-than-expected
34 percent due to higher writedowns for bad debt and lower fees
from capital markets [ID:nSIN241964].
Deutsche Bank also slashed UOB's target price to S$11.30 from
S$12.40 due to the bank's lower return-on-equity.
UOB shares fell about 6 percent to S$9.38, their lowest in
almost six years, while DBS shares dropped 4.2 percent and
Overseas-Chinese Banking Corp slipped 3.6 percent.
The benchmark Straits Times Index <.FTSTI> fell 2.7 percent.
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