OCBC Investment Research has upped its rating on UOB to a "buy" from "hold", and boosted its fair value estimate to S$30.10 from S$25.36, saying that Asian banks are buoyed by a positive outlook.

"The recent re-rating of the banking sector has seen Asian banks enjoying higher valuations from the recent trough in 2016, especially Singapore banks which saw the main drag from the oil and gas sector in 2016," said OCBC analyst Carmen Lee in a report on Friday.

She said the brokerage is expecting broad-based growth in both net interest income and non-interest income for 2018. Fee income should see a boost from better wealth management earnings and credit card operations.

"Outlook for the region is still fairly optimistic and we expect Singapore banks to be in a good position to ride this trend."