Ahead of Singapore banks’ 3Q earnings releases, Andrew Chow, research head at UOB KayHian, says people not expecting any major surprises and are resigned to margin compression from low SIBOR, and “hoping that the loan growth won’t slow down too much because of the quiet property market. The fall in property transaction volumes is a little bit worrying, and coupled with the expected compression in NIMs, people generally are not that upbeat.”

But adds house Overweight banks, as valuation-wise “there’s probably very little downside considering DBS (D05.SG) is probably trading at 1.1-1.3 times price to book, OCBC (O39.SG) is probably 1.5-1.6 times (P/B) so there’s not much downside — but whether the (earnings) are going to be a good catalyst for the stocks is an entirely different story.”

UOB (U11.SG) kicks off banks’ results later today, shares down 0.9% at $18.56. DBS reports on November 4, OCBC November 1.

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