SINGAPORE (May 17): Credit Suisse has picked DBS Bank as its top buy, expecting it to benefit comparatively more from rising US rates than its peers while potential improvements in asset quality trends could provide further upside to earnings.
DBS also appears to have the most surplus capital, meaning there could be more upside surprise to dividends, says lead analyst Danny Goh in a Monday report which has outperform calls on both UOB and OCBC.
For the 1Q17 ended March, net profit for the three banks accounted for 25-27% of street’s full-year estimates on higher-than-expected NOII and lower provisions. Goh says the results could prompt the street to raise earnings estimates, in anticipation of better earnings in coming quarters on the back of an expected rise in NIM.
