SG Banks 1Q11 Earnings Preview: Credit Suisse maintains mkt weight. For 1Q11 preview, tip UOB to show the best momentum. Note that banks 1Q11 results geings next Fri (DBS 29 April, UOB 6 May, OCBC 12 May) and expect overall net profit to be up 10% QoQ, 5% YoY helped by good momentum in loan growth, fee income but partly offset by margin pressure. Add that Loan growth momentum should continue to be strong reflecting strong YTD system loan growth across SG banks’ core mkts…..
Caution of margin pressure which could continue through 1H11, driven by funding costs in Hong Kong for DBS and pricing pressure in Malaysia/Indonesia for UOB/OCBC. Fee income growth should continue to be robust, driven by strong market volumes and loan growth. Conclude that UOB trades at a 6% discount to OCBC on P/B, despite superior ROE.
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