Singapore Banks - CGSI Research 2024-03-14: Dividends To Retain Interest In The Sector

• The delay of the commencement of US Fed fund rate cuts bodes well for banks’ NIMs, in our view. At current juncture, DBS/OCBC/UOB are factoring in 5/4/3 rate cuts (25bp each, in 2H24F) in their expectations, in contrast with the 3 rate cuts currently forecasted by the US Fed fund futures. This then raises the question of potential earnings downside risks for the sector.

Manageable impact from a delay or rise in US Fed fund rate cuts

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• In all, the net profit impact from either a delay or an additional interest rate cut comes up to around - 3% to +2% on an annualised basis – a manageable quantum, in our view.

Capital management is a key priority

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Andrea CHOONG CGS International Research | LIM Siew Khee CGSI Research | https://itrade.cgsi.com.sg 2024-03-14

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