Singapore banks likely to post record earnings

12th February, 2019 11:23:24 printer

Singapore: The three Singapore banks are expected to announce record full year 2018 earnings in their upcoming Q4 results with modest loans growth amid higher margins.

Eagerly anticipated will be an announcement of higher dividends from United Overseas Bank (UOB) and perhaps also from OCBC Bank; also the 2019 prospects by the banks' chiefs will be dissected and analysed given that worries are building that economic growth this year may be less rosy, report agencies.

DBS Bank will report Q4 and full year 2018 results on Feb 18, followed by OCBC and UOBon Feb 22.

For full year 2018, DBS, OCBC and UOB are expected to deliver record net profit of S$5.7 billion, S$4.7 billion and S$4.1 billion respectively, according to Bloomberg estimates.

For Q4, DBS, OCBC and UOB could post net profit of S$1.35 billion, S$1.21 billion and S$1 billion according to the average estimates of two analysts.

"Interest will be on growth projections and upside/downside risk to them. We will also look out for credit cost and operating expense guidance," said Krishna Guha, Jefferies analyst.

"We expect results to be broadly in line for UOB and OCBC, but potential ROE (return on equity) disappointment for DBS," said Robert Kong, Citi analyst.

Challenging 4Q18 markets will impact wealth management/trading income, Mr Kong said.

"Loan growth still robust yoy (year-on-year), but softening momentum qoq (quarter-on-quarter), indicating a more subdued loan growth outlook into 2019," he said.

While the industry's loans growth has been tepid, the three local banks will enjoy decent growth from mortgages, corporate and regional lending.

Bank lending in Singapore was flat in December 2018 from a month ago on broad weakness across both business and consumer loans, preliminary data from the Monetary Authority of Singapore showed.