SG Banks

SG Banks: Philip guides that fees and commission still a key driver for growth. DBS and OCBC delivered in 1Q14 fees and commission in few key areas that Philip was positive on: wealth management, trade-related and loans-related fees. UOB had lackluster fee income growth in 1Q14. Philip says that while naturally, investors would prefer UOB for its ASEAN play in a flight to quality, it reiterates that DBS has proven asset quality and concerns on China exposure is overblown as DBS remains disciplined on their trade fiancé businesses, and that China situation is stabilizing with potential meaningful recovery over the next few quarters. The house maintains an O/W rating on the sector, and has the following ratings: 1) DBS: maintains Accumulate with TP $19.01, on solid earnings growth profile 2) OCBC maintains Neutral with TP $9.74, on limited upside and stretched valuation 3) UOB: maintains Neutral with TP $22.34, on overhang on its WHB acquisition