Singapore Banks - DBS Research 2020-03-31: More Lending In Feb’20

Singapore Banks - DBS Research | SGinvestors.io DBS GROUP HOLDINGS LTD (SGX:D05) OVERSEA-CHINESE BANKING CORP (SGX:O39) UNITED OVERSEAS BANK LTD (SGX:U11)

Singapore Banks - More Lending In Feb’20

  • Feb’20 saw increased lending, likely in anticipation of COVID-19 uncertainty.
  • Loan-to-deposit ratio continues to ease.
  • Mortgage book still holding firm m-o-m.
  • Keep watch on downside risks even as Singapore banks’ share prices have corrected 22-29% YTD. See OCBC Share Price; UOB Share Price; DBS Share Price.



Feb’20 saw increased lending, likely in anticipation of COVID-19 uncertainty.

  • In Feb’20, loans grew 2.0% m-o-m/ 8.2% y-o-y, led by growth in ACU loans to businesses.
  • Since Dec’19, loans have grown 3.5%, led by loans to Financial Institutions, Business Services, General Commerce, Transportation, Storage and Communication. We believe that the increased lending may be in part attributed to businesses drawing down on working capital loans, amongst others, to shore up liquidity in anticipation of COVID-19 uncertainty.
  • We see overall loan growth for Singapore banks at c.3-4% for FY20F, remaining cognisant of downside risks of slowing global growth.
  • Principal moratoriums may continue to buffer overall loan books in the months to come as Singapore banks have been rolling out various relief measures since mid-Feb.


Loan-to-deposit (LDR) ratio continues to moderate on growing deposit base.

  • Deposits grew 0.9% m-o-m/ 8.9% y-o-y, continuing to outpace DBU loan growth, as fixed deposit demand remain high. LDR (DBU) continued to ease to below 100%, a level last seen in Jun’13. As of Feb’20, LDR stood at 98.9%, while S$ non-bank LDR was at 81.8%.
  • Mortgage book continues to hold firm m-o-m in Feb’20. Mortgage book saw a slight decline of 0.1% m-o-m/ 1.6%y-o-y, after seeing its first positive m-o-m growth in Jan’20.
  • We believe the current COVID-19 situation may weigh on an impending property market recovery in the meantime. Big-ticket purchases are likely be deferred amidst the uncertain economic outlook, which will affect both the primary and secondary markets. Continued drawdowns of previous new bookings should provide some buffer for the mortgage book.


Keep watch on downside risks even as Singapore banks’ share prices have corrected c.22-29% since Jan’20.






Rui Wen LIM DBS Group Research | https://www.dbsvickers.com/ 2020-03-31
SGX Stock Analyst Report NOT RATED MAINTAIN NOT RATED 99998.000 SAME 99998.000
HOLD MAINTAIN HOLD 8.600 SAME 8.600
HOLD MAINTAIN HOLD 19.000 SAME 19.000



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