- Key takeaway from DBS’s 2Q23 briefings is that its dividend trajectory is intact (+S$0.24 p.a.). We lift our FY23-25F dividend expectations to S$2.22-2.70.
Factoring in NIM upside from the recent US Fed fund rate hike
- - Read this at SGinvestors.io -
- The NIM outperformance (reported +4bp q-o-q to 2.16% vs our +1bp expectation) was amongst the key surprises in 2Q23. This was largely driven by the rebound in HIBOR. Although its CASA ratio slid further to 56% in 2Q23 (4Q22: 60%), CASA declined a smaller ~S$26bn in 1H23 (vs. S$64bn in 2H22).
- The softer fixed deposit growth helped alleviate funding cost pressures. DBS’s NIM was at 2.2% as at end-Jun 23, and stayed around this level in Jul 23. We expect NIM upside in 2H23F to come from the US Federal Reserve (Fed) fund rate hike in Jul 23 and residual pricing of its commercial book.
- - Read this at SGinvestors.io -
- We raise our FY23-25F NIM expectations by ~9-11bp to ~2.06-2.17% given the elevated NIM performance and Fed fund rate hike.
- Read more at SGinvestors.io.
