OCBC

OCBC: Citi upgrades to Buy from Neutral with $10.03 TP, on back of an expected robust 1Q12 results with $10.03 TP. House note that profits should be lifted by a strong life insurance result, and took a positive read through from recently reported 1Q12 bank results, which suggested some return of loan pricing power, a benign markets backdrop for treasury and continued low provisions, with no signs of asset-quality deterioration. House economists also note that there could be upside risk to 2012 GDP forecast of 3.6%. Raised 2012E EPS estimates 7% (13x 2012E P/E and P/B of 1.56x vs. 12.5% ROE). Note that OCBC has underperformed both its Singapore bank peers year-to-date (+14.5% vs UOB +26.5%). House revised 2012E profit forecast of $2.68bn is 14% above Bloomberg consensus 2012 profit of $2.35b.