- Singapore banks’ (SG Banks) 2Q23 results were a slight beat, mainly on a stronger-than-expected performance by DBS (SGX:D05).
- UOB (SGX:U11) is our sole BUY as:
- - Read this at SGinvestors.io -
- valuation appears undemanding at 0.96x FY24F P/B vs 12.6% ROE, and
- relatively smaller exposure to Greater China.
2Q23: Higher loan provisions a dampener.
- 2Q23 sector net profit was down 3% q-o-q mainly on a 56% q-o-q rise in loan allowances – pre-emptive provisions were booked in by OCBC (SGX:O39) and UOB, and the latter making full provision for a Thai corporate account.
- - Read this at SGinvestors.io -
- Y-o-y, 1H23 earnings surged 42% on NII growth and NIM expansions of 43% y-o-y and 61bps.
Dividends.
- All 3 banks declared interim dividends. See
- With the strong 1H y-o-y earnings growth and commitment to improve capital efficiencies, SG Banks boosted 1H23 absolute dividend by 25-43% y-o-y. Dividend payouts ranged from 45% for DBS to ~50% for OCBC and UOB. DBS also shared that it can return a further S$1.20 per share to shareholders in the coming years as part of its capital management plan.
- We believe investors will view DBS’s clear pathway in a positive light, and wait for its peers to provide further clarity on their respective plans.
- SG Banks currently offer more than 6% dividend yield, which will help support total shareholders’ returns.
Guidance largely unchanged.
- Read more at SGinvestors.io.
Singapore Research RHB Securities Research | https://www.rhbgroup.com/ 2023-08-17
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)