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United Overseas Bank: Growing Conservatively

Singapore's second-largest bank, United Overseas Bank (UOVEY), has been criticized in the past for being too conservative.

"But being conservative has sure been the way to go over the past year," says Peter Spano, manager of Preferred International Value fund. Spano looks for foreign companies selling cheaply relative to their peers and that demonstrate earnings growth and a healthy balance sheet.

By holding down costs and minimizing risky loans, United has improved its finances and is in a good position to expand its product offerings. For example, United plans to use its 270-branch network to sell insurance and mutual funds.

Spano says United should be able to generate annual earnings growth of 11% over the next five years. Analysts polled by Thomson Financial/First Call see 15% long-term growth. The stock sells for 13 times estimated 2003 earnings of 97 cents per share.

-- Courtney McGrath

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