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Analysts remain 'overweight' on Singapore banking sector due to NIM improvement

Felicia Tan
Felicia Tan8/16/2022 12:32 AM GMT+08  • 5 min read
Analysts remain 'overweight' on Singapore banking sector due to NIM improvement
Analysts from UOB Kay Hian and PhillipCapital have kept their "buy" calls for the banks in their respective reports. Photo: Bloomberg
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Analysts from UOB Kay Hian and PhillipCapital have kept their “overweight” calls on the Singapore banking sector as all three local banks recorded net interest margin (NIM) improvements across the board, which contributed to the higher net interest income (NII) during the 2QFY2022 ended June.

For the 2QFY2022, DBS Group Holdings (DBS) reported a net profit of $1.82 billion, up 7% y-o-y, while Oversea-Chinese Banking Corporation (OCBC) saw earnings increase by 28% y-o-y to $1.16 billion. Meanwhile, United Overseas Bank (UOB)’s net profit increased by 11% y-o-y to $1.11 billion for the period.

“The accelerated pace of NIM expansion and increased sensitivity to higher interest rate are a pleasant surprise,” says UOB Kay Hian analyst Jonathan Koh.

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