Banking on Wealth – Reframing the Singapore Banks Story; DBS to Buy

Research evidence excerpt

Banking on Wealth – Reframing the Singapore Banks Story; DBS to Buy

count for close to 30% of group pre-tax profit over the medium term, reducing OCBC (Buy) 30.0 9% 3.6% 1.9 15.7

earnings dependence on the rate cycle and supporting structurally higher ROEs.

Source: BofA Global research

Well set for double-digit wealth AUM growth BofA GLOBAL RESEARCH

We see HSD-to-mid teens wealth AUM growth as sustainable over the medium term

across SG banks. This should be driven by: (1) 5-7% annual net new money inflows; (2) 3- Exhibit 2: PO changes

Summary of changes to PO5% market and NAV appreciation; and (3) continued increases in wallet share and

product penetration. Singapore continues to gain share as Asia's preferred wealth hub, New PO Previous

while DBS, OCBC and UOB are expanding relationship manager headcount, advisory DBS Buy (from U/P) 75.00 55.00

capabilities and regional wealth centers to capture this opportunity. UOB Buy 50.00 40.00

OCBC Buy 30.00 23.00

Source: BofA Global ResearchRaise target prices across the sector

BofA GLOBAL RESEARCH

We raise target prices across SG banking sector to reflect stronger confidence in wealth

ROE – return on equitymgmt. as a structural earnings driver and greater earnings durability than previously

NIM – net interest marginsappreciated. We raise our PO to S$75 for DBS, S$50 for UOB and S$30 for OCBC, and

Non-II – non-interest incomeincrease our EPS estimates by 3%-3% for DBS and OCBC, and 1% for UOB through

WM – wealth management2028E on avg., reflecting stronger wealth growth assumptions, and higher confidence in

NII – net interest incomesustainable through-cycle profitability. Our target prices imply forward P/B multiples of

CIR – cost to income ratio3.0x for DBS, 2.1x for OCBC and 1.6x for UOB, broadly supported by our medium-term