UPDATE 1-UBS raises targets on 5 Canadian banks

June 11 (Reuters) - UBS raised its price targets for five Canadian banks, including Bank of Montreal (BMO.TO) and Bank of Nova Scotia (BNS.TO), saying stronger capital markets and net interest margins could offset a rise in provision for credit losses.

"Capital markets revenues appear more sustained, and personal and commercial NIMs (net interest margins) appear to be stabilizing, which are an important underpinning of future revenue growth," analyst Peter Rozenberg said in a note to clients.

The analyst said current earnings outlook remains negative due to lower loan growth, higher provision for credit losses, and increased regulatory concerns, but Canadian banks continue to remain well positioned.

Rozenberg said he prefers Bank of Nova Scotia due to higher than average long-term growth and returns from International and prefer Canadian Imperial Bank of Commerce (CM.TO) due to the lowest valuation.

For price target changes, please click [ID:nWNAB8817] (Reporting by R. Manikandan in Bangalore; Editing by Anil D'Silva)