SG Banks Results Conclusion

SG Banks Results Conclusion: SG Loans and advances accelerated in Jan, growing at 16.1% YoY. Credit demand continues to broaden with general commerce growing 38.3% YoY (Dec: 32.7%). Nomura note that core holding is OCBC for strong ASEAN presence, and broad integrated product platform; DBS is showing traction in better leveraging its core franchise strengths, particularly S$CASA deposit base, although biggest kicker remains interest rate direction…..

- MS maintain forecast of 9% loan growth for 2011, expect mortgages to grow at 11.0% vs. 22.9% achieved last year. Top pick is DBS for an undervalued recovery UOB, while valuations are undemanding, has benefited from one off gains in 2010 that appear unsustainable; hence, with significant challenges in earnings growth, it is the least preferred exposure.

- CS maintain market weight, business loan growth could drive overall growth in 2011, as housing loan growth slows (mortgage applications are down ~20% after the govt property market cooling measures). SG banks expect low- to mid-teen group loan growth in 2011. OCBC remains as top pick near term.