- In the near term, DBS (SGX:D05) offers high dividend visibility with yields >6%. Raise target price to S$62.79. Operationally, DBS is resilient.
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- DBS’s scale and integrated footprint places it in a prime position for growth amidst reshaping global trade. Investments in AI and emerging technologies should support better efficiencies and new revenue opportunities in the medium term.
NII resilient despite rates volatility.
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- With funding costs continuing to retreat amidst ample liquidity, expect overall spreads to be supported in the near term. Excess liquidity is being parked in HQLA delivering risk-adjusted ROEs of >50%, according to Management.
- DBS is also seeing opportunities for credit growth in TMT, real estate (especially driven by Singapore’s construction boom), renewables, mortgages, LBOs and wealth-linked lending. We believe these drivers should enable NII to be flat y-o-y in 2026E despite falling rates.
Geared towards key regional themes.
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