Singapore Banks 4Q23 Earnings - CGS-CIMB Research 2024-01-23: Expect Some Seasonal Softness

• We expect DBS to declare final dividend of S$1.04, OCBC to declare S$0.43 dividend, and UOB to declare S$0.95 final dividend in 4Q23F. See earnings calendar for dates of earnings release.

Singapore banks earnings release: Watch for revised FY24F NIM and business growth outlook

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• In 4Q23F briefings, we expect banks to provide renewed interest rate outlooks and correspondingly their views on its implications on loan growth and asset quality going forward.
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• Asset quality deterioration as a result of the elevated interest rate environment is a downside risk.

DBS: We think a S$0.50 special dividend may be on the cards

• We expect DBS (SGX:D05) to post 4Q23F net profit of S$2.53bn (-4% q-o-q, +7% y-o-y) as operating trends seen in 3Q23 likely persisted. We expect NIMs to contract ~2bp in 4Q23F, reflecting higher funding costs from a shift of CASA into fixed deposits in 2H23 – consistent with DBS management’s view of NIMs having peaked in 3Q23, and its expectations of full-year NIMs averaging 2.16% in FY23F.
• We anticipate non-II to be sequentially weaker in 4Q23F given the seasonalities, though y-o-y momentum should remain intact. As a whole, 4Q23F CTI could trend higher towards ~41% given the lower income base and slight uptick in opex for digital and overall business purposes.
• We expect full-year FY23F credit costs to trend at the lower end of DBS’s ~10-15bp guidance given its relatively benign showing thus far.
• See DBS's dividend history. We anticipate DBS to hike its ordinary dividend to S$0.54 per quarter commencing 4Q23F, and declare a special dividend of S$0.50 for FY23F.

OCBC: NIMs likely to exceed management’s ~2.25% guidance for FY23F

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Andrea CHOONG CGS-CIMB Research | LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2024-01-23 SGinvestors.io

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