DBS’ Share Price is Lagging Behind UOB and OCBC: Can it Catch Up?

The Smart Investor2022-06-09

Singapore’s largest bank’s share price is lagging behind its two peers. Can it eventually surpass them?Source: DBSThe local banks have performed well in the past year.But one bank’s share price is ...

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Comments

BlueDaisy
2022-06-09
BlueDaisy
SG banks are great for shareholders
Jason_LSE
2022-06-09
Jason_LSE
Too bureaucratic. Not willing to open their crypto platform to regular investors. Only serve the high net worth. [Anger]
MSTAN
2022-06-09
MSTAN
👌👌
HTChin
2022-06-09
HTChin
My preferred are DBS and OCBC. DBS : payout quarterly dividendOCBC : aggressively share buy back (UOB none of the above and it share price usually fall harder compared to the other 2 banks during stock market down days)
Menaka
2022-06-09
Menaka
Waiting for share price increase
_dachad
2022-06-09
_dachad
Another way to look at it is that the price needs to consolidate a bit more to make it more attractive

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Can it eventually surpass them?Source: DBSThe local banks have performed well in the past year.But one bank’s share price is ...</p>\n\n<a href=\"https://thesmartinvestor.com.sg/dbs-share-price-is-lagging-behind-uob-and-ocbc-can-it-catch-up/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"O39.SI","symbol_name":"华侨银行","start_time":0,"source_url":"https://thesmartinvestor.com.sg/dbs-share-price-is-lagging-behind-uob-and-ocbc-can-it-catch-up/","article_id":"1126394202","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1126394202","pubTimestamp":1654741699,"columns":[],"sourceInfo":{"source_id":"lsy1602567310727","name":"The Smart Investor"},"weMediaInfo":null,"summary":"Singapore’s largest bank’s share price is lagging behind its two peers. Can it eventually surpass th","collect":0,"end_time":0,"defaultTopTitle":"thesmartinvestor.com.sg","property":[],"viewcount":null,"language":"en","relate_stocks":{"O39.SI":"华侨银行","U11.SI":"大华银行","D05.SI":"星展集团控股"},"translate_title":"星展银行股价落后于大华银行和华侨银行：能否迎头赶上？","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"D05.SI":0.9,"O39.SI":0.9,"U11.SI":0.9},"content_text":"Singapore’s largest bank’s share price is lagging behind its two peers. Can it eventually surpass them?Source: DBSThe local banks have performed well in the past year.But one bank’s share price is lagging.DBS Group (SGX: D05) chalked up a record net profit of S$6.8 billion for its fiscal 2021 (FY2021) earnings.Its peers United Overseas Bank Ltd (SGX: U11), or UOB, and OCBC Ltd (SGX: O39) have reported strong numbers, too.UOB’s FY2021 saw net profit hit S$4 billion while OCBC achieved anet profitof S$4.86 billion.The good run continued into the first quarter.For their fiscal 2022’s first quarter (1Q2022), all three banks have reported steady year on year loan growth and stabilisation of their net interest margins (NIMs).DBS’ share price, however, has lagged behind its peers, falling by 6% year to date.UOB and OCBC have risen by 6% and 4.4% year to date, respectively.Can Singapore’s largest bank’s share price catch up with the other two lenders? Let’s dig deeper to find out.Stands to gain the most from interest hikesShare prices naturally track the health of the business over the long term.What we are witnessing now could be a combination of poor sentiment and weaker expectations for DBS compared with UOB and OCBC.If we can deduce whether DBS’ business will do better in the medium term, then we can make a case for its share price to eventually play catch-up.The first catalyst on the horizon is the US Federal Reserve’s interest rate hikes.As inflation in the US has hit a four-decade high recently, the central bank there has also targeted aggressive rate hikes, starting with a 0.5% increase back in May.Banks are slated to benefit from these hikes as they can expand their NIMs, thereby increasing their net interest income (NII).On this front, DBS has communicated that it will see a S$1.9 billion uplift if the Federal Reserve increases interest rates by one percentage point.This increase makes up more than one-fifth of its FY2021 NII.In contrast, UOB and OCBC have announced an NII uplift of just S$600 million and S$700 million, respectively.These numbers represent 9.4% and 12% of their FY2021 NII, respectively.Hence, DBS stands to benefit the most from this interest rate cycle in the coming quarters.Acquisitions are being integratedAside from organic growth from an increase in its loan book and higher NIMs, DBS has also been busy on the acquisition front.In November 2020, the lender’s Indian arm bought over Lakshmi Vilas Bank to expand its presence in the world’s second-most populous nation.Half a year later, DBS took up a 13% stake in Shenzhen Rural Commercial Bank (SZCB) in China for around S$1.08 billion to expand its reach into the Greater Bay Area.And just this January, DBS coughed up double of what it paid for SZCB when it purchased Citigroup’s (NYSE: C) Taiwan division.These acquisitions show the bank’s commitment to growing its presence in the region as it strengthens its competitive position in India, Mainland China, and Taiwan.Multiple streams of revenueIn addition to the acquisitions and NII uplift, DBS has also diversified its income streams by taking on various initiatives.These include new businesses such as the setting up of a digital exchange.It is also working to become a technology business by collaborating with various partners to develop next-generation solutions.One of these is Partior, an open industry platform that taps on blockchain to accelerate inter-bank movements. DBS is working with JP Morgan (NYSE: JPM) and Temasek on this initiative.Another promising initiative is Climate Impact X, a world-class carbon exchange and marketplace that DBS set up along with Singapore Exchange Limited (SGX: S68), Standard Chartered Bank (LON: STAN) and Temasek.Climate Impact X recently made headway by partnering with Puro.earth, a start-up owned by NASDAQ Inc (NASDAQ: NDAQ), to stimulate the supply and demand for technology-based carbon credits in Asia.DBS’ valuation is a tad richInvestors, however, need to note that DBS’ valuation is a tad rich compared to its peers.The bank is trading at a price-to-book ratio of 1.47 times, much higher than the 1.18 times and 1.03 times that UOB and OCBC are trading at, respectively.As the above initiatives kick in and DBS’ net profit improves, this valuation should naturally decline in tandem.Get Smart: Patience and a long term viewDBS has many catalysts that can take its business to the next level.Investors need to be patient and take a long-term view of its business prospects.Over time, its share price should be able to catch up with its peers.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9058051540,"gmtCreate":1654758684980,"gmtModify":1676535506167,"author":{"id":"3582677971530678","authorId":"3582677971530678","name":"BlueDaisy","avatar":"https://static.tigerbbs.com/0747094283743978b62fb8b1ee2cf44c","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3582677971530678","idStr":"3582677971530678"},"htmlText":"SG banks are great for shareholders&nbsp;","listText":"SG banks are great for shareholders&nbsp;","text":"SG banks are great for shareholders","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9058051540","repostId":1126394202,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9058066199,"gmtCreate":1654755096411,"gmtModify":1676535505726,"author":{"id":"4095252946433820","authorId":"4095252946433820","name":"Jason_LSE","avatar":"https://static.tigerbbs.com/60e2530d54f2a0d278bad7b3284cdef5","vip":1,"crmLevel":6,"crmLevelSwitch":0,"authorIdStr":"4095252946433820","idStr":"4095252946433820"},"htmlText":"Too bureaucratic.&nbsp; Not willing to open their crypto platform to regular investors. Only serve the high net worth.&nbsp;[Anger]&nbsp;","listText":"Too bureaucratic.&nbsp; Not willing to open their crypto platform to regular investors. Only serve the high net worth.&nbsp;[Anger]&nbsp;","text":"Too bureaucratic. Not willing to open their crypto platform to regular investors. Only serve the high net worth. [Anger]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9058066199","repostId":1126394202,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9058083871,"gmtCreate":1654752940793,"gmtModify":1676535505244,"author":{"id":"4089461104605170","authorId":"4089461104605170","name":"MSTAN","avatar":"https://static.itradeup.com/news/1d0ff53a35c30afecbd1fa0c5ed59f07","vip":1,"crmLevel":5,"crmLevelSwitch":0,"authorIdStr":"4089461104605170","idStr":"4089461104605170"},"htmlText":"👌👌","listText":"👌👌","text":"👌👌","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9058083871","repostId":1126394202,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9058094177,"gmtCreate":1654749230599,"gmtModify":1676535504499,"author":{"id":"3558572212270238","authorId":"3558572212270238","name":"HTChin","avatar":"https://static.tigerbbs.com/18b5addeebc1b55d0e0aa45772b119a3","vip":1,"crmLevel":4,"crmLevelSwitch":0,"authorIdStr":"3558572212270238","idStr":"3558572212270238"},"htmlText":"My preferred are DBS and OCBC.&nbsp;DBS : payout quarterly dividendOCBC : aggressively share buy back&nbsp;(UOB none of the above and it share price usually fall harder compared to the other 2 banks during stock market down days)&nbsp;","listText":"My preferred are DBS and OCBC.&nbsp;DBS : payout quarterly dividendOCBC : aggressively share buy back&nbsp;(UOB none of the above and it share price usually fall harder compared to the other 2 banks during stock market down days)&nbsp;","text":"My preferred are DBS and OCBC. DBS : payout quarterly dividendOCBC : aggressively share buy back (UOB none of the above and it share price usually fall harder compared to the other 2 banks during stock market down days)","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9058094177","repostId":1126394202,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9051777460,"gmtCreate":1654746681663,"gmtModify":1676535504071,"author":{"id":"4098337318399680","authorId":"4098337318399680","name":"Menaka","avatar":"https://community-static.tradeup.com/news/0dbf06624c2f214737a438656a0b8756","vip":1,"crmLevel":5,"crmLevelSwitch":0,"authorIdStr":"4098337318399680","idStr":"4098337318399680"},"htmlText":"Waiting for share price increase&nbsp;","listText":"Waiting for share price increase&nbsp;","text":"Waiting for share price increase","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9051777460","repostId":1126394202,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9051747842,"gmtCreate":1654745154786,"gmtModify":1676535503733,"author":{"id":"4106309378680090","authorId":"4106309378680090","name":"_dachad","avatar":"https://community-static.tradeup.com/news/e6856c1f1ee94253ef9a7fa17811e96c","vip":1,"crmLevel":6,"crmLevelSwitch":0,"authorIdStr":"4106309378680090","idStr":"4106309378680090"},"htmlText":"Another way to look at it is that the price needs to consolidate a bit more to make it more attractive","listText":"Another way to look at it is that the price needs to consolidate a bit more to make it more attractive","text":"Another way to look at it is that the price needs to consolidate a bit more to make it more attractive","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9051747842","repostId":1126394202,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":80,"commentSize":15,"repostSize":0,"favoriteSize":2,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1126394202"}