Singapore Banks - RHB Invest 2024-06-27: Taking A Breather? What’s Next After Good 1H24

• SG Banks’ main near-term thesis, has been compressed and is now close to that being offered by the market, making it a challenge for the sector to meaningfully outperform the market in 2H24, especially nearing the rate cut cycle.
• Still NEUTRAL on banking sector. Our stock picking framework remains dividend yield and growth.
• - Read this at SGinvestors.io -

Banks’ share price & earnings performance review.

• SG Banks posted strong 2Q share price performance, buoyed by expectations that the Federal Funds Rate (FFR) cut will be pushed back leading to fewer cuts for this year (positive for NII and bottomline), as well as a good set of 1Q24 results. See DBS share price, OCBC share price and UOB share price.
  • - Read this at SGinvestors.io -
• 1Q24 reporting quarter saw SG Banks generally beat expectations on non-II and credit cost. Operating income rose 9% y-o-y (+8% q-o-q), led by higher non-II (+16% y-o-y, +31% q-o-q) as treasury, insurance and fees all did well. NII rose 4% y-o-y (flat q-o-q) on asset growth (+5% y-o-y, +3% q-o-q).
• Meanwhile, CIR was stable y-o-y at 39.4% (4Q23: 44.8%) as was sector credit cost at 19bps (1Q23: 18bps; 4Q23: 20bps). With that, 1Q24 sector PATMI was up 8% y-o-y (+21% q-o-q).
• We raise our FY24F-26F sector PATMI by 4-5% pa during the reporting season. See report:
  • Read more at SGinvestors.io.

Above is an excerpt from a report by RHB Securities Research.
Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.

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)