SINGAPORE (May 27): Excluding real estate investment trusts, the local banks are probably the safest dividend plays for now. This is despite growing geopolitical and economic uncertainties. In the short term, rising trade tensions and the increasing probability of slower global and US growth could weigh on their share prices.
Banks have always been seen through the lens of GDP growth. Their business models and strategy are based on where the best opportunities lie. Earnings growth is important for banks because earnings help build capital, and all three banks reported q-o-q and y-o-y earnings growth in the first quarter.
DBS Group Holdings announced net profit of $1.65 billion for 1QFY2019, up 9% q-o-q and 25% y-o-y, boosted by wealth management, trading income and a $101 million write-back.