Banks

Banks: Post-results, Deutsche noted that earnings of all three banks were supported by a decent recovery in non-interest income, driven by stronger trading income from seasonal effects being the key driver.

Although the first quarter earnings run-rate is trending comfortably vs. full-year earnings estimates, an upgrade in core earnings is unlikely as higher NIM from SIBOR/SOR could be offset by weaker loan growth, a lower interbank yield and potentially higher credit costs.

Few common trends among the banks-
1) NIM expects further upward re-pricing and benefiting margins (more for DBS and OCBC);
2) Non-interest income, in particular wealth management growth, remains a key driver;
3) Loan growth remains more challenging in 2015 and, given the current run rate, overall growth could come in around mid-single digits (as opposed to high single digits, as previously guided);
4) Banks are actively managing funding costs (in particular wholesale USD funding), with a slowdown in asset growth;
5) Asset quality remains benign, with no systemic concerns. Relatively, the banks have signalled higher concerns in Indonesia and China.

Overall, house still prefers DBS (Buy, TP $23.20) the most among the banks, given its superior risk-reward and superior upside catalysts versus its peers.

Deutsche also has a Buy on OCBC with TP of $12.00 and UOB on Hold with TP of $25.00.