DBS

DBS: UOB KayHian notes that while all 3 S’pore banks' earnings outperformed forecasts by a wide margin, DBS was the most impressive as it was not aided by investment gains or non-core-asset divestments. All 3 banks benefited from margin expansion, fee-income growth and a trading-income boost. OCBC has an added growth dimension from life insurance, which contributed strongly. House keeps the sector as Overweight, citing underlying economic growth in S’pore and around the region remains resilient despite negative developments in Europe. Highlights asset quality for S’pore banks remains pristine and credit costs are expected to remain low. Prefers DBS for its ability to execute its strategic priorities, consistency in fee-income growth and trading-income stability, while trading at a depressed 1.09x P/B. Rates DBS at Buy with $19.50 target. Upgrades OCBC, which trades at 1.3x P/B, to Buy from Hold and raises its target to $11.75 from $9.35.. It does not rate UOB.