Banks: Tough to see material upside. CLSA reiterated Underweight rating for Singapore banks, after their below average finish to 2014 in ROA and ROE terms. It is unlikely that the banks will benefit from an earnings upgrade cycle in 2015 as they did in 2013 and 2014.
The focus for 2015 will be on organic growth. All three banks envisage a more challenging operating environment in 15CL vs recent history. DBS was the most upbeat and UOB was the most cautious.
All three banks anticipate mid-to-high single digit loan growth in 15CL, NIMs should be flat to up, the liquidity environment is expected to remain challenging and asset quality is expected to remain relatively robust in the banks’ key geographies.
Order of preference is: DBS (O-PF), UOB (UPF) and OCBC (U-PF).
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