Guess which clients UOB tagged as its 'sweet spot'

They have investible assets of SGD350K-2m.

According to Nomura, UOB said that the macro situation appears to have stabilised and the downside posed by the EU economies did not have a significant impact on this part of the world.

The Asean market has stayed resilient, buoyed by the rise of the middle income market and intra-regional trade.

FY13F growth is expected to stay at the high single-digits levels, driven by Malaysia, Thailand and Indonesia. In Singapore, loan growth is expected to be in the mid single-digits range, versus 10% in FY12.

Here's more from Nomura:

UOB’s NIM fell by 8bps q-q in 4Q12 due to the abundant liquidity in Singapore which weighed on the interbank market. Further, management explained that there was some movement away from longer-dated securities to the shorter end.

For FY13F, management expects margins to remain under pressure. Fortunately, the bank saw an upward re-pricing of mortgages by 20-30bps q-q in 4Q12, the effect of which it expects will be visible in 2H13.

On the deposit side, the foreign banks will be looking to build their local currency base and this will likely result in greater competitive pressures going forward.

UOB’s non-interest income grew by 14%y-y to SGD1.5bn FY12 led by the wealth management business. UOB sees its sweet spot in second-tier, high-net-worth clients (investible assets of SGD350K-2mn), which it views as an underserved market.

Plans are afoot to double the current number of relationship managers and grow AUM to SGD100bn by 2015, from SGD66bn in 2012.

According to UOB, its asset quality remains robust. Although there was a hefty individual impairment charge in 4Q12, this was offset by a release in the collective impairment reserve. The bank expects credit cost to stay near the 30bps level.