DBS

DBS Group Holdings (DBS): UOB Kay Hian maintains Buy at $19.55, expects loan growth to moderate and valuation to remain attractive for 3Q10 results. Overseas loans expected to slow after growing at 11.8% in 1H10 due to strongappreciation in the Sgd. Negative impact on interest margins due to low SIBOR of 0.46%. ..

…Fee income from capital mkt activities grew in 3Q10 but both fee income from credit cards and loans were moderated. Expected after the Great Singapore Sale and slow growth in loan approvals and syndication. The cost/income ratio to increase from 39.5% in the 2nd quarter to 43.8% in 3Q10 due to increased installation of ATMs and IT systems weighing on cost. DBS changed key performance indicators in 1H10 for its corporate bankers to improve cross-selling of treasury products...

Net trading income is expected to remain at current high levels. Asset quality is expected to improve and general provisions to decrease upon slower loan growth. Dubai World received approval on a restructuring plan for US$24.9b worth of debt. Non-performing loans (NPLs) related to Dubai World projected to upgrade in 6-12 mths if obligations under those terms are met.