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Banks – Singapore’s Second-Best Performing Sector in June

Banks – Singapore’s Second-Best Performing Sector in June

  • DBS Group Holdings (DBS), Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB) averaged a 1.2% gain yesterday, boosting the Straits Times Index (STI) by 1.2%.
  • In the year thus far, the three banks have averaged a dividend-adjusted return of -1.0%, and maintain an average dividend yield of 3.3%. In terms of one-year returns, they have averaged 15.7%. For the month of June, banks were Singapore’s second-best performing sector.
  • The three banks are expected to report their 2Q15 results in the last week of July.

Yesterday, Singapore’s listed banks – DBS Group Holdings (DBS), Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB) – averaged a 1.2% gain, leading the Straits Times Index (STI) higher by 1.2%.

DBS, OCBC, and UOB have a combined market capitalisation of S$128.8 billion, accounting for more than a quarter of the total market value of the Financials sector. In the year thus far, the three banks averaged a dividend-adjusted negative return of 1.0%, and maintain an average dividend yield of 3.3%. In terms of one-year and three-year returns, they averaged 15.7% and 44.3% respectively. For the month of June, financials was the second-best performing sector in Singapore after Telecommunications.

The average dividend yield of the banks is roughly on par with the Singapore Fixed Income (SFI) Index at 3.0%, and the STI’s dividend yield of around 3.4%.

For the first three months of 2015, UOB outperformed both DBS and OCBC in growing its net interest income and improving net interest margin from the fourth quarter of last year. OCBC and DBS also maintained the highest return on equity (ROE) levels at 13.2% and 12.2% respectively in the first quarter. Meanwhile, asset quality for the three banks remained stable compared to the previous quarter and the year-ago period. The banks are expected to report their 2Q15 results in the last week of July.

The recent performance of the three banks is detailed in the table below. Note that clicking directly on the stock name below will take you to the relevant profile page on SGX StockFacts.

Name SGX Code % Price Change Yesterday % Price Change YTD % Change - Dividend Adj. YTD % Change - Dividend Adj. [1 Year] % Change - Dividend Adj.  [3 Years] Div. Ind Yld. in %
DBS Group Holdings D05 1.9 0.4 1.9 26.8 64.7 3.0
Oversea-Chinese Banking Corporation O39 0.8 -2.7 -1.0 14.7 31.7 3.7
United Overseas Bank U11 0.7 -6.0 -3.8 5.7 36.6 3.4
Average   1.2 -2.7 -1.0 15.7 44.3 3.3

Source: SGX StockFacts (Data as of 30 June 2015)

Name SGX Code Mkt. Cap. in S$ mm Last Close Price (SGD) Price vs. 12M High % Price vs. 12M Low % P/E
DBS Group Holdings D05 51,286 20.690 -3.3 23.7 12.8
Oversea-Chinese Banking Corporation O39 40,539 10.180 -6.8 8.5 10.0
United Overseas Bank U11 36,964 23.070 -7.9 7.2 11.7

Source: SGX StockFacts (Data as of 30 June 2015)

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Geoff Howie
Geoff Howie

Mr Howie is the Singapore Exchange's Market Strategist - and the key contributor to the educational content and market insights of SGX My Gateway. He is also part of the Associate Faculty at SIM University,  educating students on the fundamentals of investing. 

He previously held lead broking and strategist roles across the Asia Pacific offices of a large international futures broker. Outside of his 15 year career in the financial markets he has also served as the Treasury Adviser to the Leader of the Queensland Liberal Party in Queensland Parliament.

Following High School in Hong Kong, he attended University of Queensland, receiving a Bachelors and Master's degree in Economics, the latter extending into deferred PhD work after receiving the highest grading for first-mover research and modelling conducted on the Shanghai economy.

Mr Howie's other notable achievements include receiving two Hong Kong Securities Institute Outstanding Achievers awards for the 2005 year.