Banking on Banks stocks

All the banks are on fire these few days
DBS has been breaking record highs. Soon UOB will follow too.
OCBC may surprise with its dividends.

The market likes UOB's acquisition of Citi's consumer banking business

Banks the best proxy play for rising interest rates, say analysts

STI’s upmove continues, underpinned by banks, interest rate trends

DBS to buy Citigroup Taiwan assets for NT$60 billion

OCBC will release its corporate results on the 23 February 2022.
OCBC closed $12.30, down $0.03, price hit by news of potential MAS action

MAS will consider supervisory actions against OCBC for phishing scam, adds all customers should be treated fairly

(17-01-2022, 09:28 PM)SGMarket Wrote:  UOB will release its corporate results on 16 February 2022
UOB crossed the $30.00 mark, closed at $30.18 up $0.25 cents
UOB's acquisition of Citi assets 'checks all the right boxes', analysts reiterate 'buy' calls

(17-01-2022, 09:20 PM)SGMarket Wrote:  DBS to buy Citigroup Taiwan assets for NT$60 billion

DBS acquisition of Citigroup Taiwan works out to $2.95 billion vs UOB $5 billion acquisition Citi’s consumer business in Indonesia, Malaysia, Thailand and Vietnam

(17-01-2022, 09:31 PM)SGMarket Wrote:  OCBC will release its corporate results on the 23 February 2022.
OCBC closed $12.30, down $0.03, price hit by news of potential MAS action

OCBC begins making ‘goodwill payouts’ to scam victims, says response fell short of expectations

Corporate results
DBS 14 February
UOB 16 February
Great Eastern 22 February
OCBC 23 February

DBS Results this morning
$0.36 per share dividends
XD 8 April
Payment 22 April
Stock price broke ATH $37.49. Next target $38.
Long term $40.00 is very very possible, if interim quarterly dividends of at least $0.40 expected

DBS posts record net profit of $6.81 bil for FY2021, declares dividend of 36 cents for 4QFY2021

DBS Group Holdings has posted a record net profit of $6.81 billion for the FY2021 ended December, up 44% y-o-y. The higher net profit was backed by higher return on equity (ROE) at 12.5% from 9.1% in the FY2020 previously.

The bank’s earnings for the 4QFY2021 stood 37% higher y-o-y at $1.39 billion. During the quarter, the bank declared a dividend of 36 cents, bringing the total dividend for the FY2021 to $1.20. The dividend will be payable on or around April 22.
4QFY2021’s dividend was up 9.1% q-o-q from the dividend of 33 cents in the 3QFY2021 and up 100% y-o-y from the 18 cents declared in the 4QFY2020.

The scrip dividend scheme will not be applied to the FY2021 final dividend.

Being too aggressive on rate hikes could be destabilising: Federal Reserve's Daly

[BENGALURU] Being too "abrupt and aggressive" with interest rate increases could be counter-productive to the Federal Reserve's goals, San Francisco Federal Reserve Bank President Mary Daly said on Sunday, signaling she is not yet prepared to come out of the gate with a half-percentage-point interest rate hike next month.

"So I look at the data, and I see that it is obvious that we need to pull some of the accommodation out of the economy, but history tells us with Fed policy that abrupt and aggressive action can actually have a destabilising effect on the very growth and price stability that we're trying to achieve," Daly told CBS' Face The Nation in an interview.

Daly's remarks followed a tumultuous week with regard to what the Fed may do at its meeting next month, when the central bank is expected to begin raising interest rates from the near-zero levels they have been since the early days of the coronavirus pandemic, a move Daly said she supports.

Singapore's life insurance sector posts 23% rise in new sales for 2021

SINGAPORE'S life insurance industry posted a total of S$5.4 billion in weighted new business premiums in 2021, up 23 per cent from the total amount achieved in 2020.

Notably, single-premium products saw a significant increase, surging 41 per cent year on year in weighted premiums to S$2.6 billion, from S$1.8 billion recorded in 2020.

This was mainly due to the high volume of new business obtained in the first half of 2021, amid a recovery in Singapore's economy, the Life Insurance Association, Singapore (LIA) said in a press statement on Monday (Feb 14).

Malaysia banking sector dividends expected to grow 26% in FY2021: IHS Markit

MALAYSIAN banking sector dividends are projected to increase by 26 per cent in FY2021 and 4.6 per cent in FY2022, said IHS Markit.

In a report released on Feb 8, the company said it predicts final dividends will climb by 14 per cent year on year (yoy) for the fiscal year ending December 2021, driven by CIMB Group's lower base as it decreased 2020 final dividends by as much as 60 per cent yoy.

IHS credited the projected growth in dividends to the banking sector's strong liquidity and capital buffers.

DBS profit rebounds, seen gaining as rates outlook improves

SINGAPORE: DBS Group flagged strong business momentum after its profit rose to a record last year, cementing a recovery for Southeast Asia's largest lender as pandemic-hit economies rebound and boost loan growth and asset quality.

Singapore lenders are also expected to be big beneficiaries of rising interest rates.

Brokers' take: Analysts raise targets on DBS after strong results showing

SEVERAL brokerages have raised their price targets on DBS DBS: D05 -2.39% after the bank on Monday (Feb 14) reported its fourth quarter and full year results with net profit coming in at S$1.4 billion and S$6.8 billion, respectively.

In a report on Tuesday, RHB said its higher S$42.70 target price compared to S$40.40 previously came after factoring in better net interest margins (NIMs) and lower provisions to result in 8 to 12 per cent higher net profit FY2022 to FY2023 estimates.

The research team sees sustained business momentum for the bank this year, coupled with NIM recovery and the release of provisions such that return on equity (ROE) is projected to exceed 13 per cent by FY2023.

UOB Q4 profit rises 48%; proposes S$0.60 final dividend
UOB's UOB: U11 0% net profit for its fourth quarter grew 48 per cent from the previous year on higher net interest income (NII) on the back of strong loan growth.

Net profit for the 3 months ended Dec 31, 2021 stood at S$1.02 billion compared to S$688 million in Q4 FY2020, beating the average estimate of S$986 million based on 4 analysts polled by Refinitiv.

This was however 3 per cent down from S$1.05 billion in the previous quarter due to lower trading and investment income despite higher margins and lower credit allowances, said the bank in its results release on Wednesday (Feb 16).

OCBC rolls out 'kill switch' so customers can immediately freeze accounts in scams

OCBC OCBC Bank: O39 +1.06% on Wednesday (Feb 16) introduced a "kill switch" which allows its customers to immediately freeze all their current and savings accounts during an emergency.

The new measure comes after almost 470 customers lost a total of S$8.5 million to SMS phishing scams since last December.

The kill switch extends to joint accounts, ATM access, debit and credit cards, digital banking, as well as the OCBC Pay Anyone app access. Customers can use this feature if they suspect they are a victim of a scam or believe key account-related details have been compromised.

Analysts positive on UOB seeing strong FY2021 results

Analysts remain positive on United Overseas Bank (UOB), as the bank’s net profit of $1.02 billion for the 4QFY2021 ended December came in slightly above consensus’ expectations of $998 million.

In an unrated report dated Feb 17, UOB Group Research analyst Jonathan Koh notes that the worst could be behind the bank amid a stabilising operating environment.
“Management sees improvement in consumer sentiment in Singapore. There are green shots of recovery and significant upside in the Asean region, although the pace of recovery may vary by country. There is sizeable flow of foreign direct investments (FDI) into Asean,” he writes.

UOB is also seen as a beneficiary to the interest rate hikes by the US Fed, in which management has already guided that every hike of 25 basis points will lead to a four- to five-basis point net interest margin (NIM) expansion for UOB.
This, says Koh, translates to an additional net interest income of $150 million to $200 million per year.

I expect the market will react adversely to the Budget, but certain stocks like banks will rally. Stock like CLI who privatised its property deep elopement may move also. Fodd stocks will rally also. May be bad day for REITs.

Budget 2022 positive for banks, SGX, says Maybank Securities Singapore

The additional $500 million jobs and business support package for SMEs announced as part of Budget 2022 is deemed positive for the three local banks, given how they will enjoy some relief from fallout of the pandemic.

As such, risks of non-performing loans – which is already at a level deemed “benign” - can be further lowered. In addition, the banks get to enjoy potential fee and loan growth, says Maybank Securities Singapore in a post-Budget commentary on Feb 19.

Furthermore, with more green bonds to be issued – as part of the wider push towards sustainability – Singapore’s green financing ecosystem can enjoy a lift, leading to potential higher fee income and incremental loan growth for the banks.
In addition, the government is extending the enterprise financing scheme for M&A loans to domestic deals as well.
By doing so, there could be more deal activity, driving demand for higher advisory, investment banking and advisory services.

(19-02-2022, 12:56 PM)LongXia Wrote:  I expect the market will react adversely to the Budget, but certain stocks like banks will rally. Stock like CLI who privatised its property deep elopement may move also. Fodd stocks will rally also. May be bad day for REITs.

Before all these analysts reports we already said banks will be good, food will be good, REITs not so good.

Brokers' take: Analysts mixed on OCBC after Q4 results miss consensus

ANALYSTS are mixed on OCBC after the bank posted a lower than expected net profit and revenue for Q4 FY2021, below consensus expectations by about 19 per cent.

In a research report on Wednesday (Feb 23), Maybank Securities downgraded its call OCBC to "hold" from "buy" and lowered its target price to S$14.04 from S$14.67.

Meanwhile, on Thursday, RHB and DBS Group Research maintained their "buy" calls on OCBC with different target prices. RHB lowered its target price to S$14.40 from S$14.80 and DBS raised its target price to S$15 from S$14.

DBS, OCBC, UOB said to be cutting financing for Russian energy trades

[SINGAPORE] Singapore's biggest banks are restricting trade financing for Russian raw materials, as the war in Ukraine spurs lenders in Asia's largest energy and commodities trading hub to reduce exposure to the sanction-hit country.

The limits include a halt on issuing so-called letters of credit in US dollars for trades involving Russian oil and liquefied natural gas, said sources.

DBS Group Holdings Ltd, Oversea-Chinese Banking Corp and United Overseas Bank Ltd have stopped issuing letters of credit involving Russian energy deals because of uncertainty over the course of sanctions, said these sources, who spoke on condition of anonymity.

Analysts still positive on OCBC as FY2021 earnings perform below expectations

Analysts from CGS-CIMB Research, DBS Group Research, PhillipCapital, RHB Group Research and UOB Kay Hian are recommending investors continue to add their positions in Oversea-Chinese Banking Corporation (OCBC) even after the bank’s net profit of $973 million for the 4QFY2021 stood below consensus’ estimates by 18%.

The miss was due to the heftier 44 basis points (bp) of credit costs, and above the 25 basis points CGS-CIMB analysts Andrea Choong and Lim Siew Khee expected.

According to their estimates, DBS’s 4QFY2021 net profit missed their estimates by 14%.

That said, Choong and Lim have kept their “add” call on the bank with the same target price of $14.20.

To them, OCBC is attractive at 1.1x FY2022 P/BV, below its 1.4x peak during [the] last rate hike cycle, write the analysts in their report on Feb 23.

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