DBS Group - OCBC Investment 2023-02-07: NIM Outlook & Dividends In Focus

DBS Group - NIM Outlook & Dividends In Focus

Published:
DBS GROUP HOLDINGS LTD (SGX:D05) | SGinvestors.ioDBS GROUP HOLDINGS LTD (SGX:D05)
  • DBS (SGX:D05) will be the first SG bank to report 4Q22 results which will set expectations for the sector. See earnings calendar for results release dates.
  • - Read this at SGinvestors.io -
  • In the next earnings release, investor attention will likely focus on DBS management’s updated FY23 guidance, NIM outlook and the bank’s scope for capital management.

At least 2 more fed funds rate hikes expected in March and May 2023

  • Following the much stronger than expected January 2023 US payrolls data and continued tightness in the labour market, our economist has highlighted the risk of more rate hikes beyond May 2023 while maintaining our base case for a recession in the US in 2H23.
  • - Read this at SGinvestors.io -

Higher NIMs for SG banks in FY23, but the pace of expansion should moderate

  • In terms of implications for Singapore banks, we expect the sector’s NIMs to see further expansion in FY23 as the lagged effect of higher fed funds rates continue to pass through (average benchmark rates have accelerated in 4Q22 by about 1.5 percentage points (ppt) from previous quarter), although increased deposit competition should also raise funding costs and lead to a more moderated pace of NIM expansion over the course of the year.
  • For DBS, we currently forecast NIM at ~2.2% for FY23, close to its peak NIMs last seen in 2006-2007.

DBS the first in the sector to report 4Q22 results, which will set expectations for the sector.

  • Read more at SGinvestors.io.




Above is the excerpt from report by OCBC Investment Research.
Clients of OCBC Securities may be the first to access the full report in PDF @ https://www.iocbc.com/.




OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2023-02-07



Read also OCBC's most recent report:
2024-03-20 DBS Group - Share Price Outperformance.

Previous report by OCBC:
2024-02-07 DBS Group - Record Profits; Strong Dividend Yield Angle.

Price targets by 5 other brokers at DBS Target Prices.

Listing of research reports at DBS Analyst Reports.

Relevant links:
DBS Share Price History,
DBS Announcements,
DBS Dividends & Corporate Actions,
DBS News Articles





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