Written by The Edge
Monday, 22 March 2010 11:04
DBS (D05.SG) is Citigroup’s top pick for sector, remaining positive on banks near term despite poor share price performance after 4Q09 results, reported Dow Jones Newswires.
The broker expects further cyclical earnings upside, to “normalised ROEs”, adding, “The drivers of earnings recovery are migrating from improving NPLs/falling provisions and net interest margins to a return to top-line loan growth and growth in noninterest (especially fee) income.”
Citi likes DBS as it can still benefit from lower provisions, bank is typically a greater beneficiary of loans growth (as small, medium sized enterprises expected to add to loans demand.
Rates stock a “buy”, targets $16.70. Shares +1.7% at $14.36.
