To The Moon

Local banks have provided decent returns this year, with DBS $DBS Group Holdings(D05.SI)$ returning 22.2%, OCBC $ocbc bank(O39.SI)$ 15.7%, and UOB $UOB(U11.SI)$ 11.62%, respectively.

The STI index has returned 5.58% so far this year. The three local banks have contributed to 7.41 percentage points of the STI index’s return. This means that without the banks' return contribution, the STI index would have dropped by 1.83% this year.

The 10-year annualized returns for DBS, OCBC, and UOB are 13.69%, 8.7%, and 7.81%, respectively, outperforming the STI index’s 4.11% over the same period.

The 10-year annualized returns of the three local banks also surpass most of the remaining STI component stocks. The only company that outperformed all three local banks in 10-year annualized return is YangziJiang $YZJ Shipbldg SGD(BS6.SI)$ , with a 20.51% return.

I remain long-term constructive on all three local banks due to loan growth recovery, higher fee income, and higher for longer net interest margins.

In conclusion, the three local banks have consistently provided decent returns in the past and are likely to remain favorites among value investors on SGX.