DBS

DBS: During DBS shareholders meeting yesterday, calls for higher interest rates for POSB customers dominated proceedings, with shareholders highlighting that POSB had in the “old days” paid higher interest rates compared to its peers, a stark contrasts to the mere 0.05% interests it pays now to average depositors. Some shareholders went the extra mile by encouraging DBS to offer higher interest rates to POSB pioneer customers or retirees, cautioning that the bank risked losing its loyal customers should it continue to pay low rates. In his response to shareholders, DBS CEO Piyush Gupta guided that the very low interest rates remain a factor of the overall market, and DBS actually absorbs some of the interest reduction, which explains why the Bank’s return on equity stands at 10 to 12%, when it could have been 12 to 13%. Mr Gupta further added that DBS has in place products and services to reward customer loyalty and assured investors on the bank’s commitment to POSB’s customers. Overall, Maybank-KE is O/w on Singapore banking sector, with DBS (Buy: TP $19.60) remaining as the house top pick, as it is best positioned to take advantage of a rising interest rate environment.