UOB (U11.SG) deserves to trade at premium to other Singapore banks given its stronger balance sheet, net interest margins, return on assets, lower cost-to-income ratio, but value starting to emerge from OCBC (O39.SG), says Phillip Securities, according to Dow Jones.

“Our preference is beginning to tilt towards the latter. This preference will be maintained as long as OCBC is able to have net income consistently higher than or on par with UOB’s. If this happens, OCBC can command a premium over UOB,” says Phillip.

The broker notes OCBC emerged from global financial crisis with least impact to its books. Rates UOB at Buy with $23 target, OCBC at Hold with $9.10 target. Expects DBS (D05.SG) to remain laggard to both rivals given its higher non-performing assets, loans ratio; keeps DBS at Hold with $14.55 target.

DBS +0.9% at $13.88, OCBC +1.4% at $8.92, UOB +0.5% at $19.60.