201012-SingaporeBanks.pdf

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1、IndustryReport1December2010(No.ofpages:22)SingaporeBanksBanks:SingaporePositiveDavidLum,CFA(65)63292102david.lum@sg.daiwacm.comStayingpositiveSummary°WereiterateourPositiveviewontheSingaporebanks,andbelievetheyofferdefensiveearningsgrowth,withreasonableearningsvisibilityandhighea

2、rningsquality.Weforecastsector(weighted-average)core-EPSgrowthof22%YoYfor2010,moderatingto9%YoYfor2011,and10%YoYfor2012.°Theloangrowthoutlookremainsrobustwhilenet-interestmarginslooksettobottomin2010,inourview.°WebelievevaluationsarecompellingbecauserelativetotheiraveragePBRs(fro

3、m2003)investorsarepayinglowerPBRmultiplestodayforbanksthatgeneratehigherROEsthantheydidinthepast.°WehaveupgradedourratingforDBSto1(Buy)from2(Outperform)afteritsrecentone-to-three-monthunderperformance(relativetotheFSSTI).WeexpectDBS’sEPSgrowthtoleadthesector,aswebelieveithasthemo

4、stscopetolowerits(loan-loss)provisionsfurtherin2011anddeliversuperiortop-linegrowthversusthesectorfor2012.°Wemaintainour2(Outperform)ratingsforUOB,foritsmorecautiousasset-growthstrategyandsteadyearningsprofile,andOCBC,foritsstrongquarterlyearningsmomentumandun-demandingvaluatione

5、venafteritsrecentthree-monthsectorandmarketoutperformance.°WehaveraisedourGordonGrowthModel-derivedsix-monthtargetpricestoS$17.30fromS$16.50forDBS,toS$21.30fromS$21.00forUOB,andS$10.80fromS$10.40forOCBC.SingaporeBanks:valuationsummarySharepricePEREPSgrowthPBRROEYieldCompanyBloomb

6、erg29-Nov-10Targetprice+/-Year(x)(%YoY)(x)(%)(%p.a.)namecode(localcurr.)Rating(localcurr.)(%)end20092010E2011E20092010E2011E20092010E20092010E20092010EDBSGroupDBSSP13.922→117.3024.3Dec15.612.710.7(18.722.318.61.31.39.110.04.03.6)UnitedOverseasUOBSP18.50221.3015.1Dec15.512.011.7(4

7、.2)29.02.91.71.511.913.13.23.7BankOversea-ChineseOCBCSP9.63210.8012.1Dec16.414.213.627.315.64.41.81.711.912.32.93.1BankingCorporationSource:Company,DaiwaforecastsIMPORTANTDISCLOSURES,INCLUDINGANYREQUIREDRESEARCHGlobalEquityResearchCERTIFICATIONS,AREPROVIDEDONTHELASTTWOPAGESOFTHIS

8、REPORT.ContentsThethreemostimportantchar