SG Financials: Morgan Stanley has earnings preview.
Expect 3Q to have been a difficult quarter for SG banks. House lower earnings estimates and TP by 5% at DBS and OCBC and believe that DBS has been oversold, since 1 Aug its share price has fallen 24.3% (19% for OCBC, 17.4% for UOB, and 17.0% for STI).
Believe the bank has made efforts to de-risk its balance sheet and capital ratios are now higher than in 2008. Maintain O/w on DBS with TP $14.99 and E/w on OCBC (TP $9.12) and UOB (TP $19.45) but preferred UOB (short term) which is likely to post the most resilient 3Q results.
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