Analysts from CGS-CIMB Research and DBS Group Research are advising investors to accumulate on Singapore bank stocks amid expectations of higher dividends in FY2021 on the gradual relaxation of the dividend caps imposed by the Monetary Authority of Singapore (MAS) in FY2020.

The sector is also seeing “budding shoots of growth”, according to CGS-CIMB analysts Andrea Choong and Lim Siew Khee, who have kept their “overweight” recommendation on the Singapore banking sector.

All three banks saw sustained loan growth momentum in January and February, as system loans for domestic banking units (DBU) and Asian currency units (ACU) expanded 1% y-o-y and 1.2% m-o-m in February. The expansion brings year-to-date growth to 3.7%, in contrast with the 1.1% contraction in FY2020.

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