Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold

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Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold

The Edge Singapore2023-03-13

Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to ...

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Comment（7）

BK99
·2023-03-17
Ah what a load of hogwash! Showing Analyst is not well read and has poor Analytical skills. MAYBANK worst bank in ASIA.
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Hazelstixks
·2023-03-14
Lol
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OO_898
·2023-03-13
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1
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PhilipGoh
·2023-03-13
Noted
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Ahvi
·2023-03-13
Yikes
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Glendons Capital
·2023-03-13
buy buy buy
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3
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BotakGuy
·2023-03-13
Ok buy on MY bank and neutral on SG banks
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Lowers UOB and OCBC to Hold</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMaybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-13 13:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold><strong>The Edge Singapore</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to ...</p>\n\n<a href=\"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold\">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://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold","article_id":"1153983200","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1153983200","pubTimestamp":1678686745,"columns":[],"sourceInfo":{"source_id":"lsy1655096814160","name":"The Edge Singapore"},"weMediaInfo":null,"summary":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “ne","collect":0,"end_time":0,"defaultTopTitle":"theedgesingapore.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"O39.SI":"华侨银行","D05.SI":"星展集团控股","U11.SI":"大华银行"},"translate_title":"Maybank将新加坡银行不良贷款风险评级下调至中性；下调大华银行和华侨银行持有","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"D05.SI":0.9,"O39.SI":0.9,"U11.SI":0.9},"content_text":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to fight inflation with slowing growth.“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.Limited upside catalysts to banksIn his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.","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":9943986067,"gmtCreate":1679042584460,"gmtModify":1679042588680,"author":{"id":"3582154836923956","authorId":"3582154836923956","name":"BK99","avatar":"https://community-static.tradeup.com/news/135c1133415675c1298dfbb871606910","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3582154836923956","authorIdStr":"3582154836923956"},"htmlText":"Ah what a load of hogwash! Showing Analyst is not well read and has poor Analytical skills. MAYBANK worst bank in ASIA.","listText":"Ah what a load of hogwash! Showing Analyst is not well read and has poor Analytical skills. MAYBANK worst bank in ASIA.","text":"Ah what a load of hogwash! Showing Analyst is not well read and has poor Analytical skills. MAYBANK worst bank in ASIA.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9943986067","repostId":1153983200,"repostType":2,"repost":{"id":"1153983200","kind":"news","pubTimestamp":1678686745,"share":"https://ttm.financial/m/news/1153983200?lang=&edition=fundamental","pubTime":"2023-03-13 13:52","market":"sg","language":"en","title":"Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold","url":"https://stock-news.laohu8.com/highlight/detail?id=1153983200","media":"The Edge Singapore","summary":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “ne","content":"<html><head></head><body><p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.</p><p>This is as central banks continue to fight inflation with slowing growth.</p><p>“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.</p><p>“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&amp;M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.</p><p><b>Limited upside catalysts to banks</b></p><p>In his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.</p><p>He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.</p><p>“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.</p><p>“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.</p><p>On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).</p><p>“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.</p><p>As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.</p><p>The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.</p><p>Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.</p><p>Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.</p><p>As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.</p></body></html>","source":"lsy1655096814160","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMaybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-13 13:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold><strong>The Edge Singapore</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to ...</p>\n\n<a href=\"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"U11.SI":"大华银行","D05.SI":"星展集团控股","O39.SI":"华侨银行"},"source_url":"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1153983200","content_text":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to fight inflation with slowing growth.“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.Limited upside catalysts to banksIn his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949550801,"gmtCreate":1678773395604,"gmtModify":1678773399861,"author":{"id":"4087903340756810","authorId":"4087903340756810","name":"Hazelstixks","avatar":"https://static.tigerbbs.com/856022887b2e9b642411bd8b3de391c1","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":4,"crmLevelSwitch":1,"idStr":"4087903340756810","authorIdStr":"4087903340756810"},"htmlText":"Lol","listText":"Lol","text":"Lol","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949550801","repostId":1153983200,"repostType":2,"repost":{"id":"1153983200","kind":"news","pubTimestamp":1678686745,"share":"https://ttm.financial/m/news/1153983200?lang=&edition=fundamental","pubTime":"2023-03-13 13:52","market":"sg","language":"en","title":"Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold","url":"https://stock-news.laohu8.com/highlight/detail?id=1153983200","media":"The Edge Singapore","summary":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “ne","content":"<html><head></head><body><p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.</p><p>This is as central banks continue to fight inflation with slowing growth.</p><p>“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.</p><p>“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&amp;M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.</p><p><b>Limited upside catalysts to banks</b></p><p>In his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.</p><p>He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.</p><p>“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.</p><p>“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.</p><p>On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).</p><p>“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.</p><p>As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.</p><p>The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.</p><p>Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.</p><p>Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.</p><p>As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.</p></body></html>","source":"lsy1655096814160","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMaybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-13 13:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold><strong>The Edge Singapore</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to ...</p>\n\n<a href=\"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"U11.SI":"大华银行","D05.SI":"星展集团控股","O39.SI":"华侨银行"},"source_url":"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1153983200","content_text":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to fight inflation with slowing growth.“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.Limited upside catalysts to banksIn his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949220497,"gmtCreate":1678699626120,"gmtModify":1678699629956,"author":{"id":"3582969710070724","authorId":"3582969710070724","name":"OO_898","avatar":"https://static.tigerbbs.com/9fb3c360d5d7711641a868a144192fc7","vip":1,"crmLevel":4,"crmLevelSwitch":1,"idStr":"3582969710070724","authorIdStr":"3582969710070724"},"htmlText":"Like&nbsp;","listText":"Like&nbsp;","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949220497","repostId":1153983200,"repostType":4,"repost":{"id":"1153983200","kind":"news","pubTimestamp":1678686745,"share":"https://ttm.financial/m/news/1153983200?lang=&edition=fundamental","pubTime":"2023-03-13 13:52","market":"sg","language":"en","title":"Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold","url":"https://stock-news.laohu8.com/highlight/detail?id=1153983200","media":"The Edge Singapore","summary":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “ne","content":"<html><head></head><body><p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.</p><p>This is as central banks continue to fight inflation with slowing growth.</p><p>“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.</p><p>“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&amp;M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.</p><p><b>Limited upside catalysts to banks</b></p><p>In his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.</p><p>He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.</p><p>“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.</p><p>“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.</p><p>On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).</p><p>“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.</p><p>As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.</p><p>The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.</p><p>Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.</p><p>Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.</p><p>As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.</p></body></html>","source":"lsy1655096814160","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMaybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-13 13:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold><strong>The Edge Singapore</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to ...</p>\n\n<a href=\"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"U11.SI":"大华银行","D05.SI":"星展集团控股","O39.SI":"华侨银行"},"source_url":"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1153983200","content_text":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to fight inflation with slowing growth.“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.Limited upside catalysts to banksIn his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949286837,"gmtCreate":1678690809729,"gmtModify":1678690814032,"author":{"id":"3574730309796268","authorId":"3574730309796268","name":"PhilipGoh","avatar":"https://static.tigerbbs.com/d6085185a57dcb9a222e871338387428","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":7,"crmLevelSwitch":1,"idStr":"3574730309796268","authorIdStr":"3574730309796268"},"htmlText":"Noted&nbsp;","listText":"Noted&nbsp;","text":"Noted","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949286837","repostId":1153983200,"repostType":2,"repost":{"id":"1153983200","kind":"news","pubTimestamp":1678686745,"share":"https://ttm.financial/m/news/1153983200?lang=&edition=fundamental","pubTime":"2023-03-13 13:52","market":"sg","language":"en","title":"Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold","url":"https://stock-news.laohu8.com/highlight/detail?id=1153983200","media":"The Edge Singapore","summary":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “ne","content":"<html><head></head><body><p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.</p><p>This is as central banks continue to fight inflation with slowing growth.</p><p>“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.</p><p>“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&amp;M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.</p><p><b>Limited upside catalysts to banks</b></p><p>In his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.</p><p>He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.</p><p>“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.</p><p>“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.</p><p>On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).</p><p>“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.</p><p>As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.</p><p>The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.</p><p>Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.</p><p>Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.</p><p>As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.</p></body></html>","source":"lsy1655096814160","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMaybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-13 13:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold><strong>The Edge Singapore</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to ...</p>\n\n<a href=\"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"U11.SI":"大华银行","D05.SI":"星展集团控股","O39.SI":"华侨银行"},"source_url":"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1153983200","content_text":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to fight inflation with slowing growth.“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.Limited upside catalysts to banksIn his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949283178,"gmtCreate":1678688850494,"gmtModify":1678688854799,"author":{"id":"3574166160473753","authorId":"3574166160473753","name":"Ahvi","avatar":"https://static.tigerbbs.com/bd216b3fbf19641a7fe648254585ce79","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3574166160473753","authorIdStr":"3574166160473753"},"htmlText":"Yikes","listText":"Yikes","text":"Yikes","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949283178","repostId":1153983200,"repostType":4,"repost":{"id":"1153983200","kind":"news","pubTimestamp":1678686745,"share":"https://ttm.financial/m/news/1153983200?lang=&edition=fundamental","pubTime":"2023-03-13 13:52","market":"sg","language":"en","title":"Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold","url":"https://stock-news.laohu8.com/highlight/detail?id=1153983200","media":"The Edge Singapore","summary":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “ne","content":"<html><head></head><body><p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.</p><p>This is as central banks continue to fight inflation with slowing growth.</p><p>“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.</p><p>“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&amp;M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.</p><p><b>Limited upside catalysts to banks</b></p><p>In his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.</p><p>He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.</p><p>“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.</p><p>“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.</p><p>On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).</p><p>“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.</p><p>As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.</p><p>The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.</p><p>Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.</p><p>Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.</p><p>As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.</p></body></html>","source":"lsy1655096814160","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMaybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-13 13:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold><strong>The Edge Singapore</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to ...</p>\n\n<a href=\"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"U11.SI":"大华银行","D05.SI":"星展集团控股","O39.SI":"华侨银行"},"source_url":"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1153983200","content_text":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to fight inflation with slowing growth.“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.Limited upside catalysts to banksIn his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949289827,"gmtCreate":1678688186169,"gmtModify":1678688189877,"author":{"id":"4120529718145852","authorId":"4120529718145852","name":"Glendons Capital","avatar":"https://community-static.tradeup.com/news/fb4eb8ca51c9078dc0b57d871e39eaf4","vip":1,"hat":"https://static.tigerbbs.com/2b6219675842600ebb42baa43c645832","crmLevel":5,"crmLevelSwitch":1,"idStr":"4120529718145852","authorIdStr":"4120529718145852"},"htmlText":"buy buy buy","listText":"buy buy buy","text":"buy buy buy","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949289827","repostId":1153983200,"repostType":2,"repost":{"id":"1153983200","kind":"news","pubTimestamp":1678686745,"share":"https://ttm.financial/m/news/1153983200?lang=&edition=fundamental","pubTime":"2023-03-13 13:52","market":"sg","language":"en","title":"Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold","url":"https://stock-news.laohu8.com/highlight/detail?id=1153983200","media":"The Edge Singapore","summary":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “ne","content":"<html><head></head><body><p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.</p><p>This is as central banks continue to fight inflation with slowing growth.</p><p>“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.</p><p>“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&amp;M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.</p><p><b>Limited upside catalysts to banks</b></p><p>In his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.</p><p>He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.</p><p>“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.</p><p>“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.</p><p>On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).</p><p>“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.</p><p>As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.</p><p>The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.</p><p>Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.</p><p>Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.</p><p>As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.</p></body></html>","source":"lsy1655096814160","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMaybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-13 13:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold><strong>The Edge Singapore</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to ...</p>\n\n<a href=\"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"U11.SI":"大华银行","D05.SI":"星展集团控股","O39.SI":"华侨银行"},"source_url":"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1153983200","content_text":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to fight inflation with slowing growth.“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.Limited upside catalysts to banksIn his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9949289132,"gmtCreate":1678688175826,"gmtModify":1678688180381,"author":{"id":"3557831813182222","authorId":"3557831813182222","name":"BotakGuy","avatar":"https://community-static.tradeup.com/news/022cac584c2e108f4c8bfef1e94aa79d","vip":1,"hat":"https://static.tigerbbs.com/f84859c65fc2d7681e28f6b8e9b0535a","crmLevel":7,"crmLevelSwitch":1,"idStr":"3557831813182222","authorIdStr":"3557831813182222"},"htmlText":"Ok buy on MY bank and neutral on SG banks&nbsp;","listText":"Ok buy on MY bank and neutral on SG banks&nbsp;","text":"Ok buy on MY bank and neutral on SG banks","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949289132","repostId":1153983200,"repostType":2,"repost":{"id":"1153983200","kind":"news","pubTimestamp":1678686745,"share":"https://ttm.financial/m/news/1153983200?lang=&edition=fundamental","pubTime":"2023-03-13 13:52","market":"sg","language":"en","title":"Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold","url":"https://stock-news.laohu8.com/highlight/detail?id=1153983200","media":"The Edge Singapore","summary":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “ne","content":"<html><head></head><body><p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.</p><p>This is as central banks continue to fight inflation with slowing growth.</p><p>“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.</p><p>“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&amp;M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.</p><p><b>Limited upside catalysts to banks</b></p><p>In his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.</p><p>He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.</p><p>“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.</p><p>“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.</p><p>On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).</p><p>“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.</p><p>As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.</p><p>The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.</p><p>Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.</p><p>Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.</p><p>As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.</p></body></html>","source":"lsy1655096814160","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Maybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMaybank Downgrades Singapore Banks to Neutral on NPL Risks; Lowers UOB and OCBC to Hold\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-13 13:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold><strong>The Edge Singapore</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to ...</p>\n\n<a href=\"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"U11.SI":"大华银行","D05.SI":"星展集团控股","O39.SI":"华侨银行"},"source_url":"https://www.theedgesingapore.com/capital/brokers-calls/maybank-downgrades-singapore-banks-neutral-npl-risks-lowers-uob-and-ocbc-hold","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1153983200","content_text":"Maybank Securities analyst Thilan Wickramasinghe has downgraded his rating on Singapore banks to “neutral” as he sees non-performing loan (NPL) risks mounting.This is as central banks continue to fight inflation with slowing growth.“Sector NPLs are at their lowest since 2015 with limited sectoral stress observed in 4QFY2022. Unprecedented Covid-19 stimulus, economic re-opening, low unemployment are contributory factors. However, a potential acceleration of Fed rate hikes, high recession probabilities in the US, Europe and stubborn inflation increases downside risks to this status quo,” he writes.“Indeed, during the global financial crisis (GFC) it took just three quarters for NPLs to rise from 1.5% to 2.5% and specific provisions (SP) jumped nearly two times between 1QFY2008-4QFY2009. Similarly, during the offshore and marine (O&M) crisis, SPs increased nearly three times between 1QFY2016- 4QFY2017. While China’s re-opening is a positive, how much of an offset this could provide is so far unclear,” he adds, estimating that credit charges could rise to 24 basis points (bps) to 26 bps in FY2023 to FY2024 compared to just 15 bps in FY2022.Limited upside catalysts to banksIn his March 10 report, the analyst points out that the sector’s risk-reward is now “largely balanced” as the banks continue to report “resilient” operations with “strong capital levels, elevated margins and a wealth management turnaround” that should see the banks through the “current tough macro environment”.He adds that he sees the banks’ net interest margins (NIMs) remaining “higher for longer” following their record growth in FY2022, but also notes that their growth may taper off.“With further hikes [from the US Federal Reserve or US Fed] forecasted, margins are set to remain elevated, which should keep net interest income (NII) supported even if loan growth disappoints,” says Wickramasinghe.“However, we expect the pace of NIM expansion to decelerate sharply (+8 bps y-o-y FY2023) as funding competition heats up driving deposit costs higher. Low-cost current account savings account (CASA) deposits dropped to 53% of the total versus a peak of 65% in FY2021. We expect this to fall further to 47% by FY2023 increasing costs,” he adds.On the back of this, the analyst sees a “bright” spot in non-interest income, especially in wealth management – where the sector has continued to see inflows in assets under management (AUM).“A diversion of these funds to higher risk fee-generating activities from passive fixed deposits needs better macro clarity. Therefore, the timing of an inflection is unclear in so far in 1HFY2023,” he says.As the analyst sees “limited upside catalysts”, he has downgraded his rating on the sector. Wickramasinghe has also downgraded his calls for United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) to “hold”.The analyst’s target prices for UOB and OCBC are at $31.73 and $13.58 respectively.Among the banks, DBS is the analyst’s top pick with its strong franchise, as well as return on equity (ROE) and North Asia growth. Wickramasinghe has a “buy” call on DBS with a target price of $39.12.Regionally, the analyst prefers Malaysian banks, CIMB and RHB, keeping his “buy” calls and target prices of RM6.60 ($1.99) for CIMB and RM5.72 for RHB. He also remains “positive” on the Malaysian banking sector.As at 10.05am, shares in DBS, UOB and OCBC are trading at $32.91, $28.54 and $12.19.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":35,"commentSize":7,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}