DBS 01 (May 08 - Jul 10)

[kennynah]

This Koh Boon Hwee seems a very impressive singaporean.... i'd love to know more and learn from his successes especially that he has done so in singapore...

[helios]

This Koh Boon Hwee seems a very impressive singaporean ... i'd love to know more and learn from his successes especially that he has done so in singapore...

don't know.

but me attending the talk on 19-feb ...

[winston]

DBS GROUP - Deutsche Bank cut DBS Group's target price target to S$11.20 from S$11.90 due to weaker loan and asset quality as a result of the economic slowdown.

[millionairemind]

Home > Breaking News > Money > Story
Feb 13, 2009
DBS profit down 40%

SINGAPORE - SINGAPORE'S DBS Group, Southeast Asia's biggest bank, posted a bigger-than-expected 40 per cent drop in quarterly profit, hit by losses from bad debts amid the global financial turmoil.
October-December net profit fell to $295 million from $491 million a year ago. Analysts had forecast net profit of $324 million, according to the average of six forecasts compiled by Reuters.

DBS, 28 per cent-owned by state investor Temasek Holdings , recorded faster loan growth than the industry average in the last two years, but it now faces the risk of rising bad loans amid a deepening recession in its main markets, Singapore and Hong Kong.

Fee income is also under threat because of faltering capital markets.

DBS shares dropped 42 per cent in October-December, more than the 23 percent drop in rival United Overseas Bank and a 30 percent fall in Oversea-Chinese Banking Corp . The benchmark Straits Times Index lost 25 per cent in the quarter. -- REUTERS

[winston]

BUY OR SELL - Are DBS shares battered enough for a buy? By Kevin Lim and Harry Suhartono

SINGAPORE, Feb 13 (Reuters) - DBS shares have fallen further than those of its two local rivals, battered by concerns about the health of its main markets of Singapore and Hong Kong - both deep in recession.

DBS, Southeast Asia's largest bank by assets, on Friday posted a 40 percent drop in quarterly profit, its worst results in three years, hit by a 48 percent rise in bad debt provisions and poor performance in Hong Kong. [ID:nSIN431227] Further provisions are expected as asset quality worsens and loans growth slows and the cost of credit rises, the fate of most banks in Asia in the year ahead.

HOW LOW CAN IT GO?

Some investors believe DBS shares have reached bottom, trading at around book value versus about 1.4 times for United Overseas Bank and Oversea-Chinese Banking Corp , according to analysts' estimates.

On Friday, despite the poor numbers, DBS shares, 28 percent-held by state investor Temasek Holdings [TEM.UL], rose 3.1 percent in a broader market <.FTSTI> up 1.1 percent, as its result came above pessimistic forecasts. DBS shares halved last year and were the worst-performing local bank stock in 2008.

Harsh Wardhan Modi, an analyst at JPMorgan which has an "overweight" call on DBS, said Singapore's largest lender was now trading close to its net tangible asset value of S$8 a share and there was very limited downside to its share price.

"Rotation from UOB and OCBC to DBS remains a high conviction call," he said.

DBS was traded at S$8.38 around 0425 GMT, up 2.95 percent from Thursday's close.

"We expect provisions to rise but nowhere near the levels seen during the Asian crisis," said Mike Kerley, a fund manager at Henderson Global Investors. "Yet, DBS trades below the levels it did during that period. To my mind the risks are in the price." "We are overweight banks in the portfolio with Singapore looking one of the more attractively valued," said Kerley, who holds DBS shares.

WORSE TO COME

Matthew Wilson, an analyst at Morgan Stanley, said he has "underweight" recommendations on DBS, UOB and OCBC, as asset quality will continue to deteriorate as Singapore's recession deepens. "We see downside risk to FY09 expected earnings." Wilson noted DBS' fourth-quarter result included S$104 million of divestment gains on securities, while there was no goodwill impairment on DBS Hong Kong which he believed was overvalued.

"I think like most banks in the region, 2009 will be tough year for DBS," said Brian Hunsaker of Fox-Pitt Kelton.

"Over the past few quarters, you had all these concerns about the structured investment loss. Now the concerns have moved towards the core lending business and core loan quality," he said.

[winston]

Singapore DBS says will stay profitable in 2009

SINGAPORE, Feb 13 (Reuters) - Singapore's DBS Group , Southeast Asia's biggest bank, expects to remain profitable despite a difficult environment in 2009, Chief Financial Officer Chng Sok Hui said on Friday.

She was speaking at a briefing for analysts and reporters on the bank's fourth quarter earnings released earlier Friday.

[ID:nSIN431227] Chairman Koh Boon Hwee said DBS remains focused on organic growth, and will concentrate on increasing its share in existing markets.

[winston]

Profit plunges at HK operations of DBS

DBS Group said net profit at its Hong Kong's operations plunged 90 percent in the fourth quarter to S$16 million (HK$82.32 million) on higher expenses and allowances.

The Hong Kong unit posted a net profit of S$390 million for last year, down 43 percent a year ago amid an economic slowdown and weak financial markets.

Net interest income for the year dropped about 18 percent to S$873 million.

DBS Group said it earned S$2.06 billion last year, down 17 percent from a year earlier.

However, net interest income grew 5 percent to S$4.3 billion.

[winston]

DBS private equity arm sets up $100 mln China fund

SINGAPORE, Feb 26 (Reuters) - DBS Group's private equity arm said on Thursday it set up a $100 million fund in China to invest in unlisted companies there.

"The initiative reinforces DBS' commitment to expand its franchise in the country, and underscores the bank's conviction in the strength and potential of the Chinese economy," the Singapore bank said in a statement.

Melvin Teo, managing director and head of DBS Private Equity, told reporters the fund will take minority stakes in mid- to late-stage growth companies with plans to list on China's domestic A-share market.

"We find the opportunities have increased as companies look to shore up their capital in the current environment," he said.

Teo said DBS Private Equity has to date invested around S$500 million ($327 million) across Asia, generating an internal rate of return (IRR) of around 30 percent.

In the case of DBS' previous private equity investments in China, the IRR had been in line with the industry norm of over 100 percent, he said, adding future returns on the mainland will likely be lower because of increased competition.

[winston]

From Cherry posted the following in the "AAR & TOL" thread:-

Winston, may I draw your attention to DBS. Its share price has risen, for the last 8 trading days, from $6.42 to $7.71 yesterday, presently $7.66. Looks like institutions were accumulating this stock.

DBS had a rights issue recently and is probably stronger than the other 2 Singapore banks to take advantage of opportunities of acquiring or expanding its overseas subsidiaries. It is a proxy for the Singapore financial sector. Therefore, institutions are likely to buy into it for their positions in the Singapore equity market.

Hi Cherry,

The following are my impressions of DBS:-
1) Non-Performing Loans will rise due to the Economic slowdown
2) Singapore and HK are small and very competitive markets. In addition, HK & Spore will not grow in the next few years.
3) Fees Income from the Wealth Management area will certainly drop, as a result of the Minibonds saga and the Economic Crisis.

A few questions that has been on my mind:-
1) If I'm an Asian Institutional Investor, would I buy a Global play like HSBC, Standard Chartered or a "HK & Spore" play like DBS ?
2) Where would DBS be growing ? China ? If China is the reason, why not just buy the Chinese banks directly? And I dont really think that China would be a meaningful source of profit for DBS in the near future.
3) Are there any more skeletons in their closet ?

Having said that, the recent rights issue and having Temasek behind them, would certainly help.

I will probably keep this on my watch-list for a multi-year play once the economic conditions have improved. I dont want to buy this counter two years early. I would prefer to catch this counter on an upward trend in earnings, rather than a downward trend in earnings as is the case now.

I will also be watching their quarterly earnings report for any signs that I may be too overly pessimistic on this counter. In the mean-time, over a 5 year horizon, I dont think business conditions will improve for them over the next two years...

[helios]

Hi Cherry,

The following are my impressions of DBS:-
1) Non-Performing Loans will rise due to the Economic slowdown
2) Singapore and HK are small and very competitive markets. In addition, HK & Spore will not grow in the next few years.
3) Fees Income from the Wealth Management area will certainly drop, as a result of the Minibonds saga and the Economic Crisis.

A few questions that has been on my mind:-
1) If I'm an Asian Institutional Investor, would I buy a Global play like HSBC, Standard Chartered or a "HK & Spore" play like DBS ?
2) Where would DBS be growing ? China ? If China is the reason, why not just buy the Chinese banks directly? And I dont really think that China would be a meaningful source of profit for DBS in the near future.
3) Are there any more skeletons in their closet ?

Having said that, the recent rights issue and having Temasek behind them, would certainly help.

I will probably keep this on my watch-list for a multi-year play once the economic conditions have improved. I dont want to buy this counter two years early. I would prefer to catch this counter on an upward trend in earnings, rather than a downward trend in earnings as is the case now.

I will also be watching their quarterly earnings report for any signs that I may be too overly pessimistic on this counter. In the mean-time, over a 5 year horizon, I dont think business conditions will improve for them over the next two years...

Point 3, imo, there'd be more skeletons and bones to pick ... will wait till Q4'09 for clearer skies ...