DBS

DBS: (S$15.04) 2Q results in line; outperformer for NIM
- DBS 2Q16 results came in line with estimates despite a 6% drop in net profit to $1.05b.
- Net interest income rose 5% as NIM widened to 1.87% (+12bps).
- Customer loans grew 1.7% stemming from corporate loans in Singapore and market share gains in housing loans.
- Non interest income rose 5.2% on improved investment banking income, and higher trading income and investment gains.
- The biggest drag was that provisions spiked to $366m (+167% y/y, +115% q/q) due to a $150m charge for O&G service provider Swiber, and NPL inched higher to 1.1% (2Q15: 0.9%, 1Q16: 1.0%).
- On relative valuations, DBS is trading at 0.91x P/B compared to 1x for both UOB and OCBC.