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Singapore banks to face impact of lockdowns and downgrades, with 'possible bright spot' in trading: Maybank

Jovi Ho
Jovi Ho7/21/2020 05:21 PM GMT+08  • 3 min read
Singapore banks to face impact of lockdowns and downgrades, with 'possible bright spot' in trading: Maybank
The effect of regional lockdowns and economic downgrades are expected to surface among Singapore banks with significant drops in interest rates driving negative pressure on net interest margins (NIMs).
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SINGAPORE (July 21): The effect of regional lockdowns and economic downgrades are expected to surface among Singapore banks with significant drops in interest rates driving negative pressure on net interest margins (NIMs), though trading may be “a possible bright spot”, says Maybank analyst Thilan Wickramasinghe.

While Wickramasinghe remains “positive” on the outlook of Singapore banks, he has given “buy” calls to DBS Group and UOB with target prices of $22.10 and $22.42 respectively, and “hold” on OCBC with a target price of $9.1467.

“OCBC has the highest likelihood of surprising on the upside, while UOB may surprise on the downside from weaker margins,” says Wickramasinghe. DBS and UOB will be reporting their 1H2020 results on Aug 6, while OCBC will do so a day later.

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