SG Banks: UBS note that 1Q11 was best qtr ever for pre-tax earnings, underpinned by strong growth in fees, commissions as well as robust loan expansion. Believe trends are sustainable, but banks’ valuations suggest they are not priced in. Think mkt is fixated on an interest rate hike being the only catalyst, but 1Q11 earnings have shown that banks can deliver quality growth without a rate hike…..
House reiterate Buy ratings on OCBC and DBS, tipping
1) strong wealth management fees;
2) robust loan growth;
3) strong current and savings account (CASA) deposits;
4) reasonable cost-to-income ratios;
5) relatively stable NIMs as key catalysts and expect a repeat of most of these trends in the coming qtrs, which augurs well for earnings.
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