OCBC OVERSEA-CHINESE BANKING CORP O39.SI DBS GROUP HOLDINGS LTD D05.SI Banking – Singapore 1Q16 Roundup: Pull-back From Trade Loans; Well Capitalised
- Banks reported single-digit growth in net interest income despite a contraction in trade loans.
- Fees were generally lower yoy with drag from market-sensitive sources. The exception was DBS, which benefitted from its bancassurance partnership with ManuLife.
- The deterioration in asset quality was mild while fully-loaded CET-1 CAR improved 0.4-0.8ppt qoq to above 12%.
OCBC OVERSEA-CHINESE BANKING CORP O39.SI DBS GROUP HOLDINGS LTD D05.SI Banking – Singapore The Beginning Of The Return To Normalcy
- Share prices of banks started correcting on 11 Aug 15 after the PBOC introduced a new market-oriented reference rate mechanism, which triggered the depreciation of the renminbi and concerns over competitive devaluation across ASEAN countries.
- Sentiments on banks should recover now that the renminbi is no longer under attack.
- Top picks are OCBC and DBS. Maintain OVERWEIGHT.
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