The three listed banks in Singapore are DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corporation Limited (SGX: O39) and United Overseas Bank Ltd (SGX: U11). The trio makes up close to 42% of the Straits Times Index (SGX: ^STI) and are loved by many investors, due to their relatively stable businesses. However, of late, the bank stocks have not done well. This is most likely due to short-term pessimism surrounding global markets. Given the recent poor share price performances, I thought it would be interesting to see which bank is still cheap as compared to the SPDR STI ETF (SGX: ES3), which is an exchange-traded fund that can be used as a proxy for the STI. The table below shows the comparison of the banks against the SPDR STI ETF (the best values amongst the banks are in bo

Public Bank Berhad (KLSE: 1295.KL) is one of Malaysia’s largest banks. Investors who are interested in Singapore’s banks – namely, DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corp Limited (SGX: O39), and United Overseas Bank Ltd (SGX: U11) – may want to learn more about Public Bank. In this article, I want to share some useful investing information about the Malaysia bank. The background Public Bank was the third largest banking group in Malaysia by asset size at the end of 2017. It had total assets of RM 395.3 billion at that point in time. The bank began its operations in 1966, and has developed into a full-service financial services group over time. It currently provides a wide range of services that include personal banking, commercial banking, Islamic b

United Overseas Bank Ltd (SGX: U11) is one of the three major banks based out of Singapore. Over the last 12 months, UOB’s stock price has increased by an impressive 19.3% to S$28.02 currently. This raises an important question: Is it an expensive stock now? Unfortunately, there is no easy answer. But, we can still get some insight by comparing UOB’s current valuations with the market’s. The three valuation metrics I will focus on are the price-to-book (PB) ratio, price-to-earnings (PE) ratio, and dividend yield. I will be using the SPDR STI ETF (SGX: ES3) as a proxy for the market; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market benchmark, the Straits Times Index (SGX: ^STI). UOB currently has a PB ratio of 1.33, which is hig

Wee Cho Yaw is listed as the sixth richest man in Singapore, with a net worth of close to $5.8 billion. He is most well-recognised as the chairman emeritus of United Overseas Bank (UOB), which his father co-founded in 1935. Besides UOB, Wee Cho Yaw also owns diverse stakes in other private and listed companies. In our 4 Stocks This Week Column, we take a look at four other listed companies he has a stake in. They include, United Overseas Land (UOL), United Overseas Insurance (UOI) and United Industrial Corporation (UIC). In addition, his holdings in these four companies also gives him major stakes in several other listed entities such as UOB Kay Hian, Haw Par, Singapore Land and others. #1 United Overseas Bank Limited (SGX: U11) With a market capitalisation of close $46.7 billion, UOB is t

Maybank Kim Eng has the conviction that the stock market is still going strong and has identified some cyclical stocks that are expected to outperform at this later stage of the upcycle. According to report, Maybank is positive on sectors such as banking, developers, industrials, consumer as well as the tech sector. Overall the economy is expected to continue to grow steadily, and when considering the prospects of a stock, analysts took into consideration the economic backdrop of a rising interest rate, higher residential property prices, as well as rising consumer confidence due to the overall growth in the economy. Another development in the regional economy includes the exponential growth in e-commerce in ASEAN which is beneficial for companies to expand their customer base and reach ou

Warren Buffett is someone who actively encourages companies to buy back their shares if the conditions are right. He once said that when the shares of outstanding companies with strong financial positions are selling below their intrinsic value, no other action can benefit shareholders as share repurchases can. On that note, let’s look at three Straits Times Index (SGX: ^STI) components picked at random that have repurchased their shares thus far during the week, as of market open today. CapitaLand Limited (SGX: C31) CapitaLand is one of Asia’s largest real estate firms with a global portfolio of assets such as integrated developments, shopping malls, and offices. On 21, 22, 23 and 24 May 2018, the property outfit bought back a total of 5,081,300 shares at a price range of between

So, how did the three local banks fare in 1Q18? Investors Takeaway: SG Banks Q1 Report Card 1. DBS Group Holdings – Leading The Race DBS Group Holdings (DBS) kicked off its quarter with a stunning result that beat the market consensus. Net earnings for DBS jumped 21 percent year-on-year and 27 percent sequentially, on the back of margin improvement and growth in its wealth management segment. It was a record quarter for DBS as well. Digitalisation has been and will remain a big focus for DBS in order to extend its customer footprint and enhance its overall efficiencies. DBS’ digital strategy is a step to pre-empt disruption from fintech players while increasing digital-customer stickiness with its products. DBS has been embarking on its mobile-only bank project (DigiBank India and Ind

Local banks performed exceptionally well over the past 12 months. A buoyant local home market, robust regional economic growth, rising interest rates and the rebound of the oil and gas sector have all been catalysts to the improved overall performances of local banks. Unsurprisingly, bank stocks have likewise risen considerably over the past year. With investor sentiment on banks gaining traction, I thought now is the perfect time to compare two prominent banks in Singapore to determine which, at current prices, is the better buy. The two banks in the spotlight are DBS Group Holdings Ltd (SGX: D05) and United Overseas Bank Ltd (SGX: U11). To determine which of these two banks make the better investment, I will compare financial aspects of the banks, as well as, current stock valuations. Wi

United Overseas Bank Limited (SGX:U11) released its first quarter results for 2018 earlier this month. As expected, the bank reported an impressive set of numbers for the quarter. Operating profit increased 7% year-on-year, while net profit jumped by a staggering 21%. However, besides these impressive headline numbers, there were, in fact, many other positives that shareholders should be pleased about. Here are three more positives from its earnings update worth mentioning. Improving cost efficiencies The expense-to-income ratio is a key metric used to assess the cost efficiency of a bank. The lower the ratio, the more cost-efficient the bank is. For the first quarter of 2018, UOB’s cost-to-income ratio declined to 44.2% from 46% in the previous quarter. This translates to a substanti

With banks in Singapore doing tremendously well financially in 2017, plus bank stocks up more than 50% on average over the last one-year period, the spotlight was firmly on them as they released their first quarter results for 2018. DBS Group Holdings Ltd (SGX:D05) and United Overseas Bank Limited (SGX:U11) had exceptional first quarters as net income and profit for both companies grew at a double-digit pace. Oversea-Chinese Banking Corporation Ltd (SGX:O39) was the last bank to release its results. Did OCBC match its competitors? In this article, I take a look at 10 important highlights from OCBC’s latest earnings. 1. Total income for the quarter rose 10% to S$2.33 billion from S$2.12 billion. Operating expenses increased 6% to S$1.03 billion. As a result, operating profit grew 13%

Warren Buffett is someone who actively encourages companies to buy back their shares if the conditions are right. He once said that when the shares of outstanding companies with strong financial positions are selling below their intrinsic value, no other action can benefit shareholders as share repurchases can. On that note, let’s look at three Straits Times Index (SGX: ^STI) components that have repurchased their shares thus far during the week, as of market open today. United Overseas Bank Ltd (SGX: U11) With more than 500 branches in 19 countries, United Overseas Bank, more commonly known as UOB, is one of the largest banks in Southeast Asia. On 7, 8 and 9 May 2018, UOB bought back 123,786 shares ranging from S$28.88 to S$29.940 per share, translating to a total cost of around S$3.6 m

Banks have certainly done well over the past two years. Favourable macro-economic conditions have led to growth in almost every business segment of the three main banks in Singapore, which are DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corp Limited (SGX: O39), and United Overseas Bank Ltd (SGX: U11). With net interest margins (the difference between a bank’s cost of capital, and the interest it earns from its loans) expected to rise further, banks are expected to continue to do well in 2018 and beyond. However, the stock prices of the three Singapore banks have also increased dramatically over the last two years. In that period, DBS, OCBC, and UOB have seen their stock prices climb by 97%, 57%, and 67%, respectively. This has certainly made investors think twice about w

United Overseas Bank Ltd (SGX: U11) is one of the three main banks in Singapore. It has a history dating back more than 80 years and operates a network of over 500 offices and branches across 18 geographies. Recently, the bank released its annual report for 2017. Broadly speaking, the bank did really well in the year. Total income and net profit after tax grew at 10% and 9%, respectively. Furthermore, there were many other attributes of the bank that bode well for its future. Here are three positive trends about its business that I noted from its 2017 annual report. Customer deposits One of the core businesses of a bank is to collect interest from loans. The bank gets capital to offer loans mostly through individuals or organisations depositing money in the bank. It is, therefore, essenti

United Overseas Banks Limited (UOB) is a leading bank in Asia with a global network of more than 500 branches and offices in 19 countries and territories in Asia-Pacific, Europe, and North America. As of 31 December 2017, UOB has a total asset base of $359 billion. Chairman Emeritus Wee Cho Yaw recently stepped down as a director after being at the helm of UOB for six decades. He believes that the management will continue to remain prudent in steering the bank forward and act in the long-term interest of shareholders. Along with Mr Wee, Hsieh Fu Hua also stepped down as non-executive chairman of UOB and succeeded by former deputy prime minister Mr Wong Kan Seng. Here are six things I learned from attending UOB’s 2018 AGM: 1. Revenue increased 10% from $8.1 billion in 2016 to $8.9 billion

With more than two-thirds of the Straits Times Index (SGX: ^STI) having reported, the first-quarter earnings season will enter the home straight next week. Genting Singapore (SGX: G13) will be the first blue chip to report next week. In February, the integrated resorts owner lifted its dividends, even though earnings fell 17%. It said that it had seen a stronger underlying performance from the leisure and hospitality segment, thanks to higher business volume. Singapore’s second-largest bank, Oversea-Chinese Banking Corporation (SGX: O39), will also report on Monday. The bank soundly beat analyst estimates in the fourth quarter, when it posted a 31% jump in net profits. It said it had seen sustained growth momentum in banking, wealth management and insurance. But will it be able to compl

In 1935, Wee Kheng Chiang founded United Chinese Bank together with six partners after raising $1 million. At that time, it was established mainly to cater to the financial needs of the local Hokkien community in Singapore. In 1965, the bank changed its name to United Overseas Bank (UOB) and has kept its name ever since. Today, UOB operates a global network of over 500 branches and offices in 19 countries worldwide. The bank is now the third largest financial services group in Southeast Asia (after DBS Group and OCBC) and is worth S$48.5 billion in market capitalization. In this article, I’ll bring a quick overview of UOB’s performance over the past 10 years, the current risks it faces, and its outlook in the near future. Here are 11 things you need to know about UOB before you invest:

A bank’s return on equity (ROE) is a key metric used to determine how efficient it is in using its shareholders’ equity to generate a profit. The higher the ROE is, the more efficient the bank is. At the same time, the return on equity must also be sustainable, and must not come at the expense of a weak balance sheet. With this in mind, I wanted to assess whether DBS Group Holdings Ltd (SGX: D05) could achieve its aggressive 13% ROE target for 2018. A sky-high goal This is an exceptionally ambitious goal. For perspective, DBS’s ROE in 2017 was just 9.31%. Furthermore, over the past five years, the highest ROE that DBS achieved was 11.05% in 2015. The other two major banks in Singapore, United Overseas Bank Ltd (SGX: U11) and Oversea-Chinese Banking Corp Limited (SGX: O39), achieved R

Banks have certainly gotten more complex over the years. Traditionally, banks used to earn their income solely from interest earned from loans that they offer. However, with modern banks offering more services (such as wealth management, credit cards, investment banking, trading etc), the task of assessing the quality of a bank’s business is now much more challenging. That said, there are some financial metrics that can help investors broadly assess the quality of a bank’s business. These metrics are by no means a ‘be all and end all’ but they do provide useful information and are easy to compare. With that in mind, I want to look at three financial metrics and use them to compare the performances of the three banks in Singapore. I will use 2017’s results as a point of co

The earnings season continues apace with banks the main focus next week. In February DBS Group (SGX: D05) said it will pay $1.20 per share in dividends from 2018 onwards. It said the higher pay out was because the Basel reforms that have been finalised would not have much impact on the bank. We will also find out if Singapore’s biggest lender can outperform again? United Overseas Bank (SGX: U11) posted a 16% jump in fourth-quarter earnings in a February. This was thanks to an increase in net interest income, fee commission and net trading income. However, operating expenses and expenses were higher. Much is expected from Singapore’s smallest bank. It was a tale of two countries for CapitaLand (SGX: C31) in the fourth quarter. Revenue fell 35% because of lower completion an

 DBS Group Holdings Ltd (SGX: D05) or DBS for short, is one of the three major banks based in Singapore, along with United Overseas Bank Ltd (SGX: U11) and Oversea-Chinese Banking Corp Limited (SGX: O39). In this article, I want to dig into DBS Group’s return on equity, or ROE. The choice of ROE Why the ROE, some of you might be asking? That’s because the financial metric gives investors important insights into a company’s ability to generate profits using shareholders’ capital. A ROE of 20% means that a company generates $0.20 in profit for every dollar of shareholders’ capital. In general, the higher the ROE, the more profitable a company is. A high ROE can also be a sign that a company has a high quality business. That said, it’s worth noting that the use of high lever