OCBC

OCBC: Citigrp downgrades OCBC from a straight Buy to Sell, and cuts TP to $9.15 from $10.03. House note that SG banks have been among the top performers ytd-2012 vs Asia banks and FSSTI, yet OCBC's muted 2Q12 NII plus mgt guidance of single-digit loan growth and softer NIMs in 2012 warrant a more cautious stance. House view it is time to take profit on OCBC, whose price has surged c.17% since early June. House cut core profit estimates 3%-6% on weaker top line NII; bottom line prospects now rely on more markets-dependent non-interest income, low provisions. 2013 profit now forecast to fall 1.5%yoy. Core profit excludes $1.15b divestment gains recently announced, which mgt hinted are more likely to be ploughed back into core business growth rather than for capital mgmt. House new target of $9.15 (from $10.03) is based on 12.3x 12E EPS of S$0.74, 1.4x P/B vs 12% ROAE. Downgrade from Buy to Sell.