A positive quarter for Singapore banks

Singapore banks had a positive quarter with a set of positive earnings for the three months ended September, largely beating market forecasts.

Singapore
Source: Bloomberg

Singapore banks had a positive quarter with a set of positive earnings for the three months ended September, largely beating market forecasts.

Oversea-Chinese Banking Corp reported that net profit was $1.23 billion, which is an increase of 62%.

However, this included a one-off gain of $391 million from an increased stake in the Bank of Ningbo. Excluding the one-off gain, the bank’s core net profit rose 11%.

UOB posted a net profit of S$866 million, up from S$730 million in the same period a year ago. This was helped by the double-digit growth in loans, strong gains in fees and trading income.

DBS, Southeast Asia’s largest bank, posted a net profit of S$1 billion, up 17% year-on-year. This was boosted by new highs from net interest income, fee income and improved trading income.

 

Total Income

Net Profit

UOB

$1.97bn (+18.5%)

$866 million (+18.7%)

DBS

$2.51bn (+17%)

$1bn (+17%)

OCBC

$2.04bn (+17%)

$1.23b (+62%)

(source: company statements)

As the potential for US interest rate hikes draws closer, this will likely prompt more of an upside for bank margins in the medium term.

Looking at DBS on a weekly chart, the stock price is on an uptrend line and is testing a resistance level of $18.60. More conservative traders should wait for the stock price to make a clear break above its resistance level. Otherwise, any pullbacks towards the uptrend line or support level of around $17.90 will present an attractive entry point.

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