Success88
04-19
$DBS GROUP HOLDINGS LTD(D05.SI)$  $UOB(U11.SI)$  $ocbc bank(O39.SI)$  

Singapore Banks: Have Profits Peaked, But Growth Still Sprouts?

Singapore's banking sector, a longstanding pillar of the nation's economy, might be past its peak earnings period. Analysts predict that rising funding costs and potential interest rate cuts by the US Federal Reserve later this year could dampen future profits. However, this doesn't paint the whole picture. Let's delve deeper into the current landscape and what's on the horizon for Singaporean banks.

Earnings Likely to Plateau

While record-breaking profits may not be the norm for 2024, analysts still expect a pick-up in loan growth compared to 2023. This suggests that even if profit margins shrink slightly, there's still room for business expansion. However, investors should be aware of potential headwinds.

Scrutiny on Wealth Management

The 2023 money laundering scandal in Singapore has cast a shadow over the wealth management sector, a key area of growth for these banks. Increased regulatory scrutiny could potentially impact future profitability in this segment.

Focus on Loan Growth

With profit growth potentially plateauing, banks are likely to prioritize expanding their loan portfolios. This could benefit sectors positioned for growth in the coming years.

Earnings Recap and Analyst Predictions

Singaporean banks – DBS Group Holdings (DBS) and United Overseas Bank (UOB) – reported strong earnings for 2023, with net profits up by 25-27% year-on-year. However, looking ahead, analysts predict a slight decline in net income for the two banks in 2024 compared to the previous year.

DBS: Net income could fall to S$9.94 billion.

UOB: Net income might drop to S$5.86 billion.

Beyond the Numbers

The Singaporean banking sector remains a vital part of the country's financial ecosystem. While short-term profit growth might slow, the focus on loan growth indicates a continued commitment to supporting businesses and driving economic activity. 

With interest rate hikes is higher for longer the significant growth for bank loans will be affected.

Do you own due diligence check before invest.  @TigerEvents @Tiger_SG @TigerClub @MillionaireTiger @TigerStars 

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After most bank stocks had a rough start, both $Taiwan Semiconductor Manufacturing(TSM)$ and $Netflix(NFLX)$ fell over 5% despite significantly exceeding earnings expectations, mainly due to weak guidance from these companies. Tesla and Meta will release earnings next week.
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Comments

  • BotakGuy
    04-19
    BotakGuy
    So can but on dips ?
    • Success88: 
      Do you due diligence check, currently there is tension on middle east and uncertain outcome. I can't advice anything.
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