“While the credit outlook has improved for banks, we believe that an earnings recovery to pre-Covid-19 levels will only be further down the road, in FY2022,” he notes.
Although the banks’ interest rates in November were at their lowest since 2014, sentiment towards the sector here is slowly improving, notes PhillipCapital analyst Tay Wee Kuang in a Dec 7 note.
Tay is maintaining “neutral” on the banking sector here, with the same call maintained on DBS with a target price of $22.60. Meanwhile, Tay downgraded both Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB) to “neutral” with target prices $9.68 and $21.10 respectively.
