SG Banks - RHB Invest 2024-11-25: Capital Management To Drive Total Returns; Now OVERWEIGHT

• Upgrade Singapore banks to OVERWEIGHT from Neutral; Top Picks: UOB (SGX:U11) and DBS (SGX:D05).
• - Read this at SGinvestors.io -
• Earnings downside risk should be limited with four US FFR cuts already baked in, while dividend yields remain attractive – further supplemented by potential capital management initiatives, now that the banks have better clarity on excess capital available.

A defensive shelter ...

• We think SG Banks present a good option to hide out from the abovementioned volatility – both from a domestic and regional perspective. Earnings downside risk looks low, with the flat earnings expected for the sector next year already taking into account the four US FFR cuts and given steps by banks to protect NII.
• - Read this at SGinvestors.io -
• Finally, loan coverage buffers were raised further in 3Q24, which gives us comfort that credit cost can be contained.

… while dividend yields still look attractive ...

• Read more at SGinvestors.io.

Singapore Research RHB Securities Research | https://www.rhbgroup.com/ 2024-11-25 SGinvestors.io

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