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S'pore banks

Take note that OCBC would not give housing loan of $100K to pple who earn less $2000 per mth while DBS would.

 

CIMB ups Singapore banks to Overweight from Neutral on new positives for sector, with heightened inflation and low short-term interest rates providing chance to take advantage of yield curve differentials in short term; is also potential stabilization of property values in medium term. Notes improved prospects for loan syndication, which could take up slack of weak equity market-related fees. Ups DBS to Outperform from Neutral, target to $23.11 from $22.40; ups UOB to Outperform from Underperform, targets $22.52 vs $20.04. But downgrades OCBC to Underperform from Neutral, cuts target to $8.28 from $9.60 on exposure to mass-market property segment and construction.

 

Analysts said some investors were banking on higher bond yields adding to lenders' margins, sending DBS higher, but some traders said the gains were due to short covering from last week's slide.

"Because DBS has the largest exposure to deposits and in terms of the loans market, so probably they are the ones who will benefit the most," said analyst Brandon Ng at Phillip Securities Research.

 

Credit Suisse reiterates Overweight call on Singapore banks sector; says UOB is top pick with Outperform rating and $24.50 target price. Rates DBS Neutral with $23.00 target price, rates OCBC Neutral with $9.00 target price. Broker says rise in long bond yields combined with minimal change in short rates is positive for banks, "as they borrow short and lend long." But says while banks gain on "gapping" margins, they will face some hit due to mark-to-market losses on existing portfolio; says DBS may see small hit to its P&L, but other 2 banks have small trading positions, most of the hit directly in equity, not P&L.