DBS, OCBC, UOB: Where are their stocks headed?

Singapore’s three dominant lenders have seen a slew of developments of late, including the central bank awarding digital-bank licences to four new players on Friday (04 December).

  • Research teams are still largely upbeat on DBS, although close to half are now neutral
  • OCBC may offer more share price upside than UOB on cheaper valuation
  • UOB could return to double-digit ROEs by the end of 2023


Out of 20 analysts, 10 recommended ‘buy’ on DBS Group Holdings Ltd while eight rated it ‘hold’. Their average 12-month target price on the counter is S$25.47.

CIMB believes DBS will lead the Singapore banking sector’s recovery to a double-digit return-on-equity (ROE). Southeast Asia’s biggest bank by assets may see its ROE improve to 10.1% by 2021 from 9% in 2020, thanks to its ‘finesse in maneuvering the markets’, wrote the brokerage, which has an ‘add’ call and S$28.35 target on DBS shares.

In India, DBS will be bailing out the ailing Lakshmi Vilas Bank (LVB). Fitch Ratings said the LVB branches will give DBS a ready network at an affordable price. However, Jefferies is of the view that scaling up might weigh on DBS’s profitability and efficiency.

And considering the limited threat from the upcoming Singapore digital banks, Jefferies kept its ‘hold’ call on Monday.

Maybank recently downgraded DBS by two notches to ‘sell’, with a S$24.63 target price, predicting that the run-up in DBS’s stock would be unsustainable.


CIMB, which rated OCBC ‘add’ with a S$12.52 target, expects the bank to return to double-digit ROEs by 2023.

Credit rating agency Moody’s foresees a ‘mild increase’ in OCBC’s problem loans ratio in 2021, rising from 1.6% as of 30 September 2020, as well as further challenges to asset quality and profitability. That being said, Moody’s believes the bank’s credit profile will remain ‘very strong’.

Meanwhile, Maybank, in downgrading OCBC to ‘sell’, commented that the stock was ‘uncompelling as a dividend play’.

DBS Group Research analyst Lim Rui Wen in late November maintained ‘buy’ on OCBC with a S$11 target, as current valuations were inexpensive and the market appeared to have priced in some economic headwinds.

‘We prefer OCBC to UOB as we believe OCBC provides better share price upside at current levels on cheaper valuation’, she wrote.

Analysts’ average target price on OCBC stood at S$10.80, and 12 out of 21 analysts recommended ‘buy’.


DBS’ Lim noted that UOB's loans as of September 2020 have expanded by 4% since December 2019. ‘We look forward to modest credit demand going forward, with recovering economic activities,’ she added.

Bright spots include growth in sustainability-related and renewable-energy loans, said Lim. ‘Further, UOB is seeking pockets of growth opportunities in intra-ASEAN and outside of ASEAN cross-border flows, as well as opportunities in trade and working capital loans,’ the analyst pointed out. She had a 12-month target price of S$24.80 and a ‘buy’ rating on UOB.

Also, the bank will likely return to double-digit ROEs by 2023, according to CIMB, which issued ‘add’ with a S$27.72 target.

On the other hand, Maybank recently downgraded UOB by a notch to ‘sell’, pointing to its rising share price amid encouraging news of Covid-19 vaccines. ‘We believe this is overdone and amplified by liquidity,’ the brokerage added.

Of the 20 analysts covering UOB, 12 said the lender was a ‘buy’ while six recommended ‘hold’. On average, the target price is S$24.06.

Want to take a position in Singaporean listed stocks – long or short?

Create an IG trading account or log in to your existing account to get started now.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG 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 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. 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, and 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.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.