SINGAPORE (June 25): Maybank Kim Eng’s Thilan Wickramasinghe has maintained his “buy” call on DBS on grounds of its effective management of environmental, social and governance (ESG) risks. The analyst has indicated a twelve-month target price of $22.10 with a 5% upside. 

“DBS displays no exceptional risks not typical for a large, regional bank for ESG. In our view, it has a regionally above-average track record of disclosure in terms of adhering to ESG standards (rated AA by MSCI). This is complemented by an overlay of a strong balance sheet (AA rated) and proactive regulatory oversight by MAS,” says Wickramasinghe. 

Among the risks faced by ASEAN’s largest bank are contagion risks from clients due to the nature of its business of lending & investments as well as internal governance risks,” says Wickramasinghe. While the analyst remarks that such risks are par for the course for a large Southeast Asian bank, he praises the Singapore bank for leading the region in establishing detailed and transparent risk management frameworks and policies to combat such risks. 

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