DBS

DBS: Daiwa Tips DBS As Top Asean Bank Pick. House raises DBS TP to $17.50 from $15.00 after increasing FY12-13 EPS forecasts 19%-21% on an increase in non-net interest income driven by higher customer-driven treasury income and higher retail fee income. After gauging DBS' progress since CEO Piyush Gupta's 2009 start, cites excellent execution, with standout success being the more than doubling of customer-related treasury income since 2009. Note DBS latched on to 2011 transaction banking opportunities, while retail investment product sales have gained traction. See improvements in cross-selling as a structural positive change at the company. Note however that some structural roadblocks persist, believing DBS no longer has an excess liquidity cushion after aggressive deployment, which will limit its future revenue in regional markets. However, tips DBS as its top Asean bank pick, citing the sharp treasury-revenue shift from proprietary to customer-driven, a healthy operating outlook and attractive valuations of 1.1X 2012 P/B.