DBS

DBS: While DBS reported a weak 4Q12, CIMB is not too concerned, noting 4Q12 core net profit of S$760m was below its $807m forecast on greater than expected NIM compression, credit costs' rise and higher opex. Some of the negatives look one-off in nature. Note that costs rose mostly on higher computerization costs, while weak IB fees appear to be more seasonal and/or one-off. Mgt's guidance on margins was surprisingly bullish - margins could be close to a bottom as the yield curve steepens, adding it "sounds like a reprieve. Note that the more structural negative was rising credit costs, but expect that to be an industry trend. House raises its target to $17.39 from $17.36, keeping a High-Conviction Outperform call.