UOB's soaring credit costs drag its growth

But the bank's strong net interest income was spurred by an upturn in margins.

UOB’s 4Q11 net profit (S$558m, +7% qoq) was within CIMB's expectations. Key positive was strong net interest income, spurred by a 6bp improvement in margins, said CIMB.

Here's more from CIMB:

Management also sounded more positive in its margin guidance. Fee income and trading also did better-than-expected, even with losses from trimming its EU debt securities portfolio. Otherwise, other positives include strong US$-deposit growth, shaving US$-LDR down to 100% and leaving UOB best-placed to capture US$ lending opportunities in 2012. Like OCBC, the key negative was also a spike in credit costs. UOB is rated Neutral.