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Singapore Banks 1Q23 Earnings Forecast - CGS-CIMB Research 2023-04-15: Dry Powder From Wealth While NIM Expansion Tapering Off

Singapore Banks 1Q23 Earnings Forecast - Dry Powder From Wealth While NIM Expansion Tapering Off

Published:
Singapore Banks DBS OCBC UOB | SGinvestors.ioDBS GROUP HOLDINGS LTD (SGX:D05) OVERSEA-CHINESE BANKING CORP (SGX:O39) UNITED OVERSEAS BANK LTD (SGX:U11)
  • We expect Singapore banks DBS. OCBC and UOB to report a modest set of earnings in 1Q23F. We think that share price movement will likely be driven by any changes in management outlook on credit demand, risk appetite and asset quality, as investors pivot away from focusing on margin expansion.
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  • Strong wealth inflows into Singapore amid global volatility (given its status as a financial safe haven) provide dry powder for deployment into wealth management products when risk sentiment improves.
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  • Although DBS likely benefited from strong wealth inflows given acute banking sector volatility over 1Q23F, though wealth management income could stay soft as negative risk sentiment persists.
  • Steady asset quality will likely translate into low credit costs (we expect ~13bp in 1Q23F). DBS’s US and European exposures are small and there are no impairments needed for its debt investment portfolio.
  • We think OCBC (SGX:O39) could post ~S$1.55bn (+19% q-o-q, +14% y-o-y) net profit for 1Q23F.
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    Above is the excerpt from research report by CGS-CIMB.
    Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.



    Andrea CHOONG CGS-CIMB Research | LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2023-04-15


    More reports on banking & finance sector:
    Analyst Reports on Singapore Banking & Finance Sector

    Read also:
    Analyst Reports on DBS Group
    Analyst Reports on OCBC Bank
    Analyst Reports on United Overseas Bank (UOB)



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