- Banks continued their positive performance in May. The best performer continued to be DBS, with a 3% increase, while OCBC and UOB improved by 2% and 1%, respectively.
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- Singapore domestic loans inched up 1.5% y-o-y in April, the largest y-o-y increase since October 2022. We expect low-single-digit growth for 2024 as loan growth is expected to continue to be positive going into 2H24. The CASA balance was maintained at 18.3% (Mar24: 18.3%).
- Maintain OVERWEIGHT. We remain positive on banks. NIMs may stay flat despite the higher-for-longer interest rate environment. A recovery in loan growth and fee income will lift profits. Bank dividend yields are attractive at 6.1%, with upside surprises due to excess capital ratios and a push towards higher ROEs.
3-month SORA & 3-month HIBOR tick up in May
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- Hong Kong interest rates recovered slightly in May. The 3-month HIBOR was up 13bps m-o-m to 4.67%, slightly reversing the decline of 16bps in April. May’s 3-month HIBOR improved by 26bps y-o-y but was 6bps lower than 1Q24 3-month HIBOR average of 4.73%
Singapore loan growth positive, largest since Oct 2022
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