Over 40 years’ heritage
Over 185,000 clients worldwide
Over 15,000 markets

Singapore Banks Earnings

The three local banks, DBS, OCBC & UOB comprise the lion’s share of the Straits Times Index (STI), so it is little surprise that their earnings announcements are closely watched.

Singapore bank Q2 earnings – Holding steady

Company Earnings Report Date
UOB 27 July 2017
DBS 28 July 2017
OCBC 4 August 2017

 

Singapore’s Q2 earnings will hit the markets from 27th July, starting with OCBC and concluding with the largest bank, DBS, on 4th August. After the jump in prices following the set of better-than-expected Q1 2017 earnings, prices for the three biggest banks in Singapore had been lacklustre, gaining slowly on revenue expectations and supported by broadly stable market conditions. The mid-year mark for earnings reports is expected to be an opportunity for investors to assess whether the strong expectations have been well-placed.

Singapore banks results and expectations

 

DBS

OCBC

UOB

Q1 Revenue (billion)

2.961

2.225

2.121

Q2 Revenue estimate (billion)

2.896

(-2.7% YoY)

2.258

(+9.6% YoY)

2.109

(+4.2% YoY)

Q1 EPS Adj.

0.48

0.23

0.47

Q2 EPS Adj. estimate

0.43

(+3.5% YoY)

0.22

(+1.2% YoY)

0.48

(+7.5% YoY)

Q1 Net income Adj. (billion)

1.209

0.970

0.774

Q2 Net income Adj. estimate (billion)

1.104

(+6.2% YoY)

0.924

(+3.18% YoY)

0.768

(+6.17% YoY)


Source: Bloomberg

The latest earnings consensus surveyed by Bloomberg suggests that we could be seeing positive revenue growth for OCBC and UOB while EPS and net income growth are expected to cut across all three banks. The latest bank loans and advances growth appear to show the positive growth trend sustaining into Q2. An average 6.9% year-on-year growth rate for bank loans had been recorded between April and May, suggesting that business remains broadly robust for local banks. On the other hand, the banks’ net-interest margins (NIMs) remain largely flat in the second quarter, unlikely to contribute significantly to revenue growth changes in the upcoming report. 

Meanwhile, concerns over oil and gas sector performance may have picked up in Q2 on the back of sliding crude prices. However the dips are unlikely to have triggered a significant worsening of non-performing loan performances and as such, provisions are expected to remain largely stable. Guidance from the local banks following Q1 earnings releases had been that bad loans have peaked, shifting investors’ focus towards growth potential. 

Year-to-date (YTD) gains for DBS and OCBC were both seen at approximately 24.1% as of 20 July 2017 while UOB trails behind at approximately 17.5%. Across the Singapore Index, which had surged approximately 14.6% YTD, banks had indeed outperformed. The next leg forward for domestic banking stocks would depend largely upon the performance of Q2 earnings in the near-term and the case for further upsides certainly appears to be strong with the current backdrop.

Technical Analysis of OCBC

Amongst the trio of banks, OCBC has shown a strong uptrend from a technical perspective, touching a fresh all-time high while DBS and UOB remain capped by earlier records. Watch for a break above the $11.20 resistance for further upward momentum and the case remains strong with this one with strong profit expectations.

OCBC

Earnings Release: 27 Jul 2017
Market Cap: S$46.81 billion1

Registered in 1932, Oversea-Chinese Banking Corporation Limited (OCBC) is the oldest bank in Singapore, after a merger of three Hokkien lenders. It counts OCBC Securities and Great Eastern Holding Ltd among its subsidiaries. The bank has a presence in 18 countries and territories, and is the second-largest financial institution in Southeast Asia (SEA) by assets.

Live OCBC prices

UOB

Earnings Release: 28 Jul 2017
Market Cap: S$40.07 billion1

United Overseas Bank (UOB) was set up in 1935 and is now the third-largest bank by assets in Southeast Asia. Having started out as United Chinese Bank, UOB was renamed in 1965 and it now has over 500 offices across 19 countries and territories. The bank is increasing its yuan business, with the asset management arm securing a RQFII licence in June 2015.

Live UOB prices

DBS

Earnings Release: 4 Aug 2017
Market Cap: S$55.05 billion1

Development Bank of Singapore (DBS) is the largest bank in Singapore by assets and was initially established by the Singapore government to assume industrial financing activities. DBS acquired the Asian private banking business of Societe Generale in 2014, and was the only ASEAN bank to be ranked among the world's top 50 private banking brands in 2015.

Live DBS prices

Why trade shares with IG?

  • Trade on desktop and mobile

    Enjoy seamless trading with our browser-based platform and mobile and tablet apps

  • Access over 8,000 global share CFDs

    Low margins and competitive spreads on a wide range of popular, global stocks

  • Competitive prices

    Competitive prices sourced from multiple venues

  • Commission from 0.1%

    Commission at just 0.1% on Singapore share CFDs

  • Direct market access (DMA)

    More control, functionality and liquidity, plus see market depth and interact with order books

  • Trade shares on margin

    Gain full exposure with a small initial deposit when you trade CFDs, but remember with leverage comes increased risk

Open an account now

It's free to open an account, takes less than five minutes, and there's no obligation to fund or trade.

1 Source: Bloomberg (July 2017)

IGA, may distribute research produced by its respective foreign affiliates within the IGA Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at +65 6390 5118 for matters arising from, or in connection with the information distributed.

This information prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Contact us

Our office is open 5 days a week Monday to Friday from 9am to 6pm. Support line is available 24hrs a day Monday to Friday.

+65 6390 5118

You can also email us helpdesk@ig.com.sg

Visit our storefront office at 9 Battery Road