Overall, DBS expects modest net interest margin (NIM) expansion of 2-5 bps, moderating loan growth and lower than historical average credit costs to support earnings growth for Singapore banks of some 7%.
SINGAPORE (June 25): DBS Group Research is retaining United Overseas Bank (UOB) as its top pick among Singapore banks while Oversea-Chinese Banking Corporation (OCBC) has been downgraded to “hold” with a target price of $11.50.
DBS likes UOB for its high dividend yield of 4.7%, strong capital profile and least exposure to Greater China. However, OCBC’s dividend policy could continue to weigh on its share price performance while inorganic growth opportunities may encounter execution risks.
