In weighing the “good and bad” of the three banks’ capital structure, Kwok says their “ample capital” this year means they are likely to curb debt issuance, with “solid” earnings supporting capital returns and modest risk-weighted asset growth.
DBS Group Holdings’ capital return plan “outclasses” its rivals in balancing returns and sustainability, says Bloomberg Intelligence’s senior credit analyst Rena Kwok.
In contrast, Oversea-Chinese Banking Corporation (OCBC) has room to optimise its capital structure as rates fall, adds Kwok in a March 6 note, pointing to its “above-peers” weighted cost of capital.
