StockNews - UOB emerges tops in profits ranking

United Overseas Bank was the most profitable bank in Singapore, netting profits of S$1.7 billion in FY05. This was against the net profit of S$1.3 billion for OCBC and S$0.8 billion for DBS. Looking forward most analysts are still expecting DBS to perform better for FY06. However, UOB is deemed to be the least risky play for banks at the moment due to its lower valuation currently. Moreover UOB has not risen as much as DBS and OCBC for the past 2 years.

As my personal opinion, UOB is the best bank stock to hold be it in the long run or short term investment. UOB's strategy of expansion has yielded results better (with its Philippines acquisition as the major mistake). On the other hand DBS' lower profit for FY05 was due to a S$1.1 billion goodwill impairment charge of its HK operations.

However, there are downside risks to UOB, as 2 major listed companies, UOL and Haw Par both holds a substantial stake in UOB and should they dispose UOB shares for shareholder returns, price of UOB will be depressed.