SG Banks: Nomura remains Bullish on SG Banks. Note that loans and advances accelerated in Mar, +19.9% YoY vs Feb at 17.3%. Credit demand continues to broaden, with general commerce +39.8% YoY vs Feb +35.3% and building & construction accelerating at 14.4% YoY. Add that peak loan utilisation and broad-based loan dd are supportive of banks’ top-line growth, with rising credit vol mitigating margin pressure from low SIBOR and competition…..
Sustained regional GDP expansion stoking credit demand and indications that margin pressure is bottoming would be key catalysts for sector. House recommends holding OCBC for its strong ASEAN presence and broad, integrated product platform. DBS shows traction in better leveraging its core franchise strengths, particularly S$ CASA deposit base, but the biggest kicker remains interest rate direction.
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