SINGAPORE (April 20): DBS Group Holding is Deutsche Bank’s top pick in Singapore’s banking sector though the research house expects the three banks to see "soft" first quarter results.

This is mainly to weak loan growth and an unfavourable statistical comparison with the last year.

“The first quarter has historically been strong for Singapore banks, but this year we expect to see soft first quarter results,” Deutsche Bank says.

An increase in bad debt provisions and lower fees from wealth management products will also weigh on the earnings of the banks, it says.

Deutsche Bank expects the sector earnings to marginally rise on-quarter but drop 4% on-year due to an unfavourable comparison with last year's comparable period.

“Asset quality will continue to fall in line with guidance. The recent oil price recovery may have temporary relieved some of the asset quality worries,” it notes.

At 12.40pm, DBS is down 0.7% at $15.76 while OCBC Bank is down 0.6% at $9.33 and UOB is down 0.5% at $19.77.