Singapore Banks

DBS Group Holdings – Rocket start to the year and ease of concern over China exposure (Benjamin Ong) Recommendation: Accumulate
Yesterday’s Close: S$ 16.94
Fair Value: S$ 19.01
- DBS posted a 1Q14 net adjusted earnings of S$1.03b which beat our expectations by ~14% on non-interest income and flat provisions
- Loans growth remained on track at 2% q-q, NIM jumped 5bp to 1.66% and net interest income rose 2%. Non-interest income leaped 76% q-q on the back of strong treasury customer flows
- Credit quality remains intact with NPL ratio at 1.0%, proving concerns over DBS’s China exposure is misplaced

Oversea-Chinese Banking Corp - Strong start to the year (Benjamin Ong)
Recommendation: Neutral
Yesterday’s Close: S$ 9.65
Fair Value: S$ 9.74 
- OCBC 1Q14 results beat our estimates on higher than expected profit from life assurance and lower than expected provisions
- Loans growth momentum remains strong and NIM leaped 6bp, similar to DBS, and deposits growing healthily
- Fees and commission climbing steadily on the back of strong wealth management income
- Maintain "Neutral”, with a revised TP of S$9.74 based on unchanged P/B of 1.32X and revised FY14E BVPS of S$7.38

United Overseas Bank Ltd - Stable but slow start to the year (Benjamin Ong)
 Recommendation: Neutral
Yesterday’s Close: S$ 21.76
Fair Value: S$ 22.34
- 1Q14 net profit of S$788m up 2.0% q-q and low quality beat of expectations on higher share of profit of associates and JV and tax adjustments
- NIM stable at 1.73% but management expects flattish FY14 NIM from pressure overseas
- Continue to like UOB’s overall resilient earnings and cautious business approach and we believe FY14 fees and commission will still come in strong despite a slower start to the year
- Downgrade to "Neutral”, with an adjusted TP of S$22.34 based on a revised FY14E BVPS of S$16.55 and unchanged P/B of 1.35X as there is limited upside based on current share price