...Strong Capitalisation: United Overseas Bank Limited's (UOB) fully loaded common equity Tier 1 (CET1) ratio of 12.1% at end-March 2016 is strong compared with most other highly rated banks globally. The bank's strong capitalisation should help buffer it against slower regional economies. Fitch Ratings expects UOB's capital ratios to stay steady, as the bank has satisfactory internal capital generation and slow asset expansion in the near to medium term. Resilient Credit Quality: The bank's asset quality has held up well due to prudent lending practices. Fitch expects a slight deterioration as the slowing economies and potentially higher market volatility present cyclical risks, but UOB's healthy provision reserves of 131.4% should protect it from significant credit deterioration. Fitch expects the direct effects of the low oil price to be manageable for UOB due to its limited exposure to the more vulnerable upstream sector of SGD4.6bn at end-March 2016 (18% of CET1 capital). We deem downside...
