DBS 01 (May 08 - Jul 10)

[winston]

Not vested. From Phillips:-

DBS – 1Q09 Results (Brandon Ng)
Recommendation: Hold (Maintain)
Previous close: S$11.90
Fair value: S$10.30

• Results review DBS reported an increase in core net earnings to S$456mil (-24.4% yoy, +19.1% qoq,
4Q08: S$383mil) due to higher operating income but negated by higher allowances for credit losses as
compared to 4Q08.

• Key risks remain as economic outlook unfavorable According to our PSR economist, we are
forecasting a contraction in Singapore's GDP growth for 2009 to be -7.2% seasonally adjusted. We think
this will impact the bank earnings significantly due to weak demand in loans, depressed margins and higher
provisions. We expect loans growth to remain weak for DBS as we expect borrowers to draw down credit
lines to tide over liquidity rather than capital expansion. We will also be keeping track of unemployment rate
in Singapore closely, as it will greatly affect the ability to repay loans.

• Recommendation With the impending factors listed above, we are cutting our 2009 earnings by 8.7% from
S$1.96bil to S$1.79bil. Together with the recent capital raising done by the Group, we find it difficult to
maintain the projected ROE in our financial valuation. As a result, we cut our ROE assumption from 10.0%
to 9.8% and our target price has been adjusted to S$10.30. This is pegged to 1.00x FY09 NAV as we input
a lower ROE and growth assumption in our Gordon growth model based on lower projected earnings.
Maintain HOLD.

[millionairemind]

July 8, 2009, 6.11 pm (Singapore time)

Update: DBS India profit growth to slow to 25-30%

* Abundant liquidity opens up other fund avenues for clients
* Applies for 6-8 new branch licences in India
* To seek retail deposits, stay away from retail lending


MUMBAI - DBS Group, Southeast Asia's top bank, expects its small Indian operations to grow at a sharply slower 25-30 per cent pace in 2009/10 as excess cash opens up more avenues for customers, a top official said on Wednesday.

A sharper-than-expected slowdown and a revival in equity markets in Asia's third-largest economy has hurt foreign lenders who largely rely on corporate lending.

'Today, customers have many avenues for tapping funds as the system is flush with liquidity and we are seeing softening of credit spreads in general,' Sanjiv Bhasin, chief executive of DBS Bank India said in an interview.

'Besides our base is also rising that could temper the sharp pace of growth,' he said.

State-run lenders control 55 per cent of loans in India, where foreign banks get just a handful of branch licences every year from the central bank.

DBS, which opened its first branch in the country in 1995, has 10 branches. It has applied for licences to open up to eight more and plans to raise retail deposits but will not enter the high risk retail lending for the next 18 months, Mr Bhasin said.

DBS generates about 90 per cent of its earnings from Singapore and Hong Kong. Earnings of its Indian unit had quadrupled to 2.6 billion rupees (US$53 million) in the past year ended March from 650 million a year earlier.

Indian companies have raised more than US$3 billion by selling shares this year, mostly since April as a sharp stock market rally ended a 15 month drought of equity sales.

Standard Chartered and Citigroup, the largest foreign lenders in the country, have already seen the profit growth of their Indian units slowing.

Standard Chartered's 2008/09 net profit growth halved to 12 per cent and Citigroup' by four-fifth to 20 per cent, the two banks said.

DBS plans to focus on retail deposits to bring down costs and diversify the liability space, Mr Bhasin said.

'Over the medium term, we plan to have retail liabilities to contribute at least a quarter of our total liability portfolio, which today is largely wholesale. We have a long way to go.'

Retail deposits, consisting largely of savings bank accounts, can cost as low as 3 per cent in annual interest payments while term deposits cost more than double that.

Mr Bhasin said the bank would not enter retail lending such as personal loans, auto and consumer durable financing for the next 18 months as the bank was yet to set up the required network.

ICICI Bank , India's No 2 lender and once the most aggressive retail player, has slowed loans to a trickle as it rejigs its loan portfolio amid rising bad debts.

'We have no plans to see a presence in the retail asset market,' Mr Bhasin said. 'Retail assets require management bandwidth, suitable technology and effective collection system.' -- REUTERS

[winston]

Not vested. From CIMB:-

DBS Group (S$13.72) - Time to lock in performance

We downgrade DBS from Outperform to Neutral. We had been bullish on Singapore banks since April. However, after a relentless rally, we deem it timely to lock in some profits, particularly on DBS.

First, it has been the clearest outperformer.

Second, muted credit costs in the next few quarters might not totally assuage NPL fears.

Third, a global environment flush with liquidity equates to low interest rates and DBS does not fare well in such an environment.

Last, we believe it has the least prospects for book-value upside in the coming quarters. Our target price remains S$13.20 (1.25x CY09 P/BV).

[winston]

Not vested.

DBS Q2 net profit down 15 pct; beats consensus

SINGAPORE, Aug 7 (Reuters) - DBS Group , Southeast Asia's biggest bank, said its second-quarter profit fell 15 percent on higher bad debt charges, a smaller-than-expected profit drop helped by strong fee and commission income.

DBS said on Friday its April-June net profit fell to S$552 million ($384 million) from S$652 million a year ago.

Analysts had an average forecast of S$455 million, according to a Reuters survey.

Analysts were expecting a strong result from DBS after rivals United Overseas Bank and Oversea-Chinese Banking Corp announced better-than-expected earnings this week.

Bad debt charges jumped to S$466 million, from S$56 million a year ago.

( Hmm... not a good sign at all )

[winston]

Not vested. From Phillips:-

DBS – 2Q09 Results (Brandon Ng)
Recommendation: Sell (Downgrade)
Previous close: S$12.84
Fair value: S$10.80

• Results review DBS reported net earnings of S$552mil (-17.4% yoy, +21.1% qoq, 1Q09: S$456mil) due to higher revenues in both interest income and non-interest income segments. Allowances were 12.6% higher over the quarter signifying the tough operating environment in the industry.

• Provisions to rise . We adjust our NPL ratio assumptions upwards from 2.0% to 3.2% for 2009 as asset quality deteriorated faster than expected. We also forecast impairment charges to remain high in the second half of this year as coverage ratio to beef up to 80% from the current 68% of NPLs. This will certainly add pressure to earnings for 2H09.

• Recommendation Although we have reduced the market risk premium in our Gordon Growth Model across the three banks, high payout ratio and low ROE pose a downside risk to DBS’ valuation. The subsequent rights issue boosted the equity substantially and with earnings declining, it is difficult to expect ROE to go beyond 10%. It is a matter of lower dividend payout or reduced growth assumption. Accordingly, our target price has been adjusted to S$10.80. This is pegged to 1.05x FY09 NAV. But we do note that this
valuation is a steep discount to the 5-year average P/B ratio of 1.4X NAV.

We downgrade the rating to SELL.

[winston]

DBS GROUP HOLDINGS - RBS downgraded DBS Group, Southeast Asia's biggest bank, to "sell" from "hold", citing lower confidence in the stock on concerns about deterioration in its asset quality.

RBS also cut its target price for DBS to S$11.00 from S$13.50.

Source: Reuters

[financecaptain]

DBS really stands for "Don't Be Singaporean", just appointed an Indian as CEO.
My experience tells me in no time, all the senior guys will likely be replaced by Indians too.
On another matter, actually a bit malu that DBS is the only bank not in ASW's survey of top 10 companies in Singapore. UOB and OCBC are both listed inside and there are only 3 domestic banks in Singapore.

DBS appoints new CEO
By Gabriel Chen

Mr Gupta (left) will fill the position left vacant by former CEO Richard Stanley's death earlier this year. -- BT FILE PHOTO

CITIBANKER Piyush Gupta, who is currently the bank's South-east Asia Pacific CEO, has been appointed the new CEO of DBS Group Holdings, the Singapore bank annnounced in a filing to the Singapore Exchange (SGX) at about 12.30pm on Tuesday.

Asian banking veteran
INDIA-BORN Piyush Gupta, 49, holds a degree in economics from St Stephen's College, Delhi University and a Masters degree in business administration from the Indian Institute of Management in Ahmedabad.



He has been a speaker at various regional and international conferences on cash management (EuroFinance, SIBOS), as well as a member of the Global Technology Steering Committee for Citibank.

... more
This confirms an earlier Straits Times report, which broke the news on its online news site just before noon that 49-year old Gupta had resigned from Citibank and will fill the position left vacant by former DBS CEO, the late Richard Stanley, who died of leukaemia in April.

His appointment was first announced to senior DBS bank staff internally via a conference call on Tuesday morning.

Both Mr Stanley and Mr Gupta were good friends and colleagues in Citibank.

Mr Gupta will start at DBS on Nov 15 and is in the process of applying for Singapore citizenship. DBS said his appointment is subject to regulatory approval.

'Gupta's broad-based banking experience, spanning frontline and support functions, positions him well to grow DBS's franchise,' said a DBS statement.

Mr Gupta was Citi Singapore's country officer for slightly over a year before moving on to his regional role, which includes overseeing countries such as Australia, New Zealand and Guam.He is also a member of an 11-member committee formed in October last year to study ways to enhance primary education in Singapore.

Mr Gupta joined Citi in 1982 and was the chief executive officer in Citibank Berhad and Citi country officer for Malaysia. During his tenure in Malaysia, he grew Citi's business particularly its global transactions services, its SME coverage, as well as Islamic banking offerings.

He also oversaw the expansion of Citi's branch network from three to seven, opening the bank's first new branch in Malaysia in 48 years, before extending Citi's reach through a sales subsidiary with 10 branches.

[winston]

We maintain our Neutral rating on DBS, rolling forward our target price from S$13.29 (1.25x CY09 P/BV) to S$14.97 (1.34x FY10 P/BV).

( The model is so accurate as to predict TP to the nearest 2 digits )

We recognise DBS’s P/BV discount to peers but reckon that this is more than justified by
its lower ROE.

[winston]

I have not seen a single Analyst comment on their Rights Issue, which was done at a very cheap price ( compared to the price now ). Besides Earnings dilution, what are the other consequences ? If they have just waited for another 6 months, they could have done the Rights issue at a very much higher price.

===============================================

SINGAPORE, Oct 26 (Reuters) - DBS , Southeast Asia's biggest bank, is set to shine among its regional peers in the third quarter, when most bank earnings benefited from an improving economic climate and buoyant capital markets.

DBS is expected to report around a 27 percent jump in net profit in the three months to September, the first expansion since the second quarter of 2008 and its best profit growth since late 2006, as it was better at taking advantage of strong markets and managing bad debts.

With equity volumes up 30 percent year-on-year, banks are benefiting from gains in trading and broking fees, and credit quality is improving as economies recover from weakness seen in the first half of the year, analysts said.

"We expect improved macro conditions and government support schemes to filter through to asset quality, which will significantly reduce credit charges," CLSA analyst Thilan Wickramsinghe said in a note.

Citigroup's Robert Kong said he would also look at how Singapore banks are managing their costs as they look to selectively hire bankers and boost expenditure to tackle a faster-than-expected pickup in business volumes.

Source: Reuters

[iam802]

This company, after 'acquiring' POSB' for so many years, and yet POSB is operating as a separate entity.

And with all these rights issues... I think most people do not need the analysts comments to figure out if it is a good buy, or shall we say a 'trading buy'

There are other options, either locally or on the HKSE.