Singapore Banks' Net Interest Margin Could Weaken on Hibor Decline -- Market Talk

Dow Jones04-18

0457 GMT - Singapore banks' 1Q net interest margin could be softer on quarter due to the steep decline in the three-month Hong Kong interbank offered rate, UOB Kay Hian analyst Jonathan Koh says in a note. As Hong Kong dollar-denominated loans accounted for 11% and 13% of 1Q total loans for DBS and OCBC, respectively, the decline in Hibor could shave off 4bp-6bp from the banks' 1Q net interest margin, he says. DBS Group Holdings and OCBC are UOB KH's top sector picks. Net interest income for both banks is expected to grow 4.0% on year, the analyst says. UOB KH has a buy rating for both banks, with a target price of S$43.25 for DBS and S$18.15 for OCBC. DBS shares are at S$36.37 and OCBC's are at S$13.79.(amanda.lee@wsj.com)

(END) Dow Jones Newswires

April 18, 2024 00:57 ET (04:57 GMT)

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Net interest income for both banks is expected to grow 4.0% on year, the analyst says. UOB KH has a buy rating for both banks, with a target price of S$43.25 for DBS and S$18.15 for OCBC. 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As Hong Kong dollar-denominated loans accounted for 11% and 13% of 1Q total loans for DBS and OCBC, respectively, the decline in Hibor could shave off 4bp-6bp from the banks' 1Q net interest margin, he says. DBS Group Holdings and OCBC are UOB KH's top sector picks. Net interest income for both banks is expected to grow 4.0% on year, the analyst says. UOB KH has a buy rating for both banks, with a target price of S$43.25 for DBS and S$18.15 for OCBC. 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