With recovery in sight, bank stocks will continue to outperform the broader market as the worst is over, says RHB Group Research. Its analysts are upgrading Singapore banks to “overweight” from “neutral”.

“Positive operating trends in 4QFY2020 and the rollout of Covid-19 vaccination programmes across the region are lifting optimism among Singapore banks. With earnings upgrades post-4QFY2020 results, sector net profit is projected to rebound by 29% y-o-y in FY2021, compared to -28% in FY2020.”

In a note on March 3, RHB is rating DBS a “buy” with target price $30, Oversea-Chinese Banking Corp (OCBC) a “buy” from “neutral” with target price $12.50 and United Overseas Bank “neutral” with target price $26.40. The two banks are the brokerage’s top picks among the Singapore banking sector.

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