SGX Market Updates

DBS, OCBC & UOB Average 10% Net Profit Growth in FY19


PUBLISHED ON |

24 February 2020

  • For the year ended 31 Dec 2019, Singapore's 3 listed banks averaged a net profit of S$5.2 billion, up  10.1% YoY. Among the 3, DBS reported the highest FY19 net profit of S$6.4 billion, reflecting a 13.6% YoY increase.

  • The trio averaged a ROE of 12.1%, versus 11.6% in FY18. The NPL ratio averaged 1.5% as at 31 Dec 2019, unchanged from the previous year.

  • Over the 2019 calendar year, the 3 banks averaged a total return of 10.0%, bringing their 1Y and 3Y total returns to 3.0% and 41.6% respectively. The two best performers in 2019 were DBS and UOB, with total returns of 15.5% and 12.8% respectively.




Singapore’s 3 listed banks, which have a combined market capitalisation of more than S$150 billion, reported their earnings for the full year and quarter ended 31 December 2019 over the last two weeks.

For the full year ended 31 December 2019, the three banks averaged a net profit of S$5.2 billion, up an average 10.1% YoY. Among the three, DBS reported the highest FY19 net profit of S$6.4 billion, reflecting a 13.6% YoY increase.

For the fourth quarter ended 31 December 2019, the trio averaged a 19.4% YoY gain in net profit to S$1.3 billion. OCBC posted the highest YoY percentage growth of 34.2% in net profit to S$1.2 billion for the 3-month period.

For FY19, the trio averaged a Return on Equity (ROE) of 12.1%, versus an average of 11.6% in FY18. DBS posted the highest ROE of 13.2%, up from 12.1% in the previous year. The three banks averaged a Non-Performing Loan (NPL) ratio of 1.5% as at 31 December 2019, unchanged from the previous year.




DBS, OCBC, UOB FY19 and 4Q19 Financial Results

Name FY19
Net Profit
(S$M)
YoY Growth
(%)
4Q19
Net Profit
(S$M)
YoY Growth
(%)
DBS 6,391 13.6 1,508 14.3
OCBC 4,869 8.4 1,243 34.2
UOB 4,343 8.4 1,006 9.8
Average 5,201 10.1 1,252 19.4

Name FY19
ROE
(%)
FY18
ROE
(%)
FY19
NPL Ratio
(%)
FY18
NPL Ratio
(%)
DBS 13.2 12.1 1.5 1.5
OCBC 11.4 11.5 1.5 1.5
UOB 11.6 11.3 1.5 1.5
Average 12.1 11.6 1.5 1.5

Source: Company data



Outlook


DBS
  • The bank was on track to meet its previous 2020 guidance prior to the outbreak of the novel coronavirus.
  • Assuming the outbreak is controlled by summer, we expect a revenue impact of around 1%-2%, and special provisions could rise by a few basis points of loans.
  • Our record performance with ROE at a new high of 13.2% demonstrates a franchise that delivers high quality results.
  • The increased quarterly dividend proposed by the board reflects the enhanced capacity of our business to generate earnings and reward shareholders.

OCBC
  • Looking ahead, the global economic outlook is expected to be weaker than originally expected.
  • We are watchful of the impact to our business and customers from the continuing trade tensions, heightened geo-political risks and the COVID-19 outbreak, and will extend support to customers to help them overcome the market challenges.
  • OCBC has a solid record of producing stable earnings through economic cycles, and we are confident of delivering sustainable returns to all our stakeholders.

UOB
  • Many signs point to more challenging times ahead, including the unfolding impact of the COVID-19 epidemic. To help cushion its impact on our customers, we have implemented a range of relief assistance measures for affected companies, especially SMEs, and mortgage relief for homeowners.
  • We believe the region will weather this storm and are confident of ASEAN’s long-term potential. We will continue to invest in our capabilities, including digital, and seize the opportunities arising from the shifting economic environment.

 Click herehere and here for full results releases of DBS, OCBC and UOB. 



DBS OCBC UOB 2019 Performances

Over the 2019 calendar year, the 3 banks averaged a total return of 10.0%, bringing their one-year and three-year total returns to 3.0% and 41.6% respectively. The two best performers in 2019 were DBS and UOB, with total returns of 15.5% and 12.8% respectively.

The tables below detail SGX’s 3 listed banks, sorted by market cap.

Name SGX
Code
Market
Cap
S$m
Total
Return
2019
%
Total
Return
YTD
%
DBS D05 64,421 15.5 -3.0
OCBC O39 48,715 1.7 0.5
UOB U11 42,993 12.8 -2.0
Average 10.0 -1.5

Name SGX
Code
Total
Return
1 Yr
%
Total
Return
3 Yr
%
Dividend
Ind Yield
%
DBS D05 5.8 57.0 4.9
OCBC O39 -1.3 29.6 4.8
UOB U11 4.5 38.0 5.0
Average 3.0 41.6 4.9

Source: Bloomberg & StockFacts (data as of 20 Feb 20)







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