Geographically, they appear to be different on the surface. Most noticeable last and this year is UOB’s further entrenchment in Asean. Meanwhile, DBS believes it is better to connect the flows of the two Asian giants, India and China, with Indonesia and Taiwan. On the other hand, OCBC will likely double down on China’s Greater Bay Area (GBA) for investment flows into its two Asean markets — Malaysia and Indonesia — and wealth management flows into Singapore.
DBS may be the largest bank in Southeast Asia, followed by OCBC (SGX:O39
) and UOB. However, the business models of all three banks have more things in common. Of late, they share another performance trait — thanks to rising interest rates, the net interest income (NII) for all three has surged, eclipsing fee income.
In FY2022 ended December 2022, DBS Group Holdings (SGX:D05) reported a record net profit of $8.2 billion. In 1QFY2023, DBS reported a net profit of $2.57 billion, an all-time high for quarterly earnings. Oversea-Chinese Banking Corp and United Overseas Bank (SGX:U11) also reported new highs for their FY2022 net profit and 1QFY2023 net profit (see Table 1), but they are both still a long way from DBS’s expected $10 billion in net profit for FY2023.
