SINGAPORE (Nov 2): United Overseas Bank’s better-than-expected third quarter results are a reason to upgrade the stock to a “hold” rating from “reduce”, CIMB says, also raising its target price to $20 a share from $18.23 previously.

UOB’s net profit was 6% above consensus estimates, due to one-off gains.

CIMB cites three positives in the results: Strong one-off investment gains; special dividends; and muted credit losses.

“These, coupled with share price weakness since July, prompts us to revise our previous negative view on UOB," the brokerage says.

As at 3.03pm, UOB is trading 1.2% lower at $20.09 a share, broadly in line with the market.