20140314-Maybank_KERPL-Singapore_Banks_Storm_in_a_teacup_16页_900kb

报告摘要

Singapore Banks Summary

Core Content

Singapore banks have significantly increased their exposure to China since 2008, with a notable shift in the composition of their loans. This growth is primarily attributed to trade loans, which are considered safer and more stable compared to other types of lending. Despite concerns about potential risks due to China's economic restructuring and shadow banking issues, the analysis suggests that these concerns are overdone.

Main Points

China Exposure Growth:
- Singapore banking system's lending to China grew at a 68.7% CAGR since 2009.
- Trade loans accounted for 65% of total loans to China as of end-2013, up from 18% pre-GFC.
- China has transitioned from a net lender to a net borrower from Singapore banks.
Bank-Specific Exposure and Growth:
- DBS has the largest exposure to Greater China, accounting for 35% of its total loans in 2013.
- OCBC has shown the strongest loan growth with a 31.6% CAGR since 2008.
- UOB has the smallest exposure at 7% and a 20.5% CAGR.
Loan Characteristics:
- Trade loans are short-term and safer, with 70% of DBS's trade loans having a six-month average duration.
- A significant portion of trade loans are backed by bank guarantees, enhancing security.
- Banks focus on selective lending to long-term winners in China, minimizing risk.
Investment Thesis:
- DBS is highlighted as the top sector pick due to its strong position in the Greater China market and benefits from rising interest rates.
- OCBC is under a HOLD recommendation due to potential distractions like the Wing Hang Bank acquisition and capital market volatility.
- UOB is recommended as BUY, with a disciplined management team and resilient ASEAN markets.

Key Information

Investment Recommendations:
- DBS: BUY, with a target price of SGD19.60 and 24.1% upside.
- UOB: BUY, with a target price of SGD23.60 and 17.4% upside.
- OCBC: HOLD, with a target price of SGD9.08 and -2.9% upside.
Risk and Catalysts:
- DBS: Risk includes unexpected departure of key personnel, Catalyst includes consistent earnings and interest rate rise.
- UOB: Risk includes Thailand political turmoil, Catalyst includes interest rate rise.
- OCBC: Risks include paying for Wing Hang Bank and prolonged capital market depression, Catalyst includes strong capital market recovery and interest rate rise.

Financial Highlights

Net Interest Income (SGD m):
- DBS: 4,318.0 (2010) to 6,071.6 (2014E)
- UOB: 3,531.9 (2010) to 4,528.2 (2014E)
- OCBC: 2,946.9 (2010) to 4,266.9 (2014E)
Fee Income (SGD m):
- DBS: 1,397.0 (2010) to 2,002.9 (2014E)
- UOB: 1,163.3 (2010) to 1,774.4 (2014E)
- OCBC: 982.8 (2010) to 1,429.1 (2014E)
Core Operating Income (SGD m):
- DBS: 7,066.0 (2010) to 9,411.2 (2014E)
- UOB: 5,568.2 (2010) to 7,045.8 (2014E)
- OCBC: 5,324.7 (2010) to 7,068.5 (2014E)
Provision Coverage:
- DBS: 99.5 (2010) to 148.6 (2016E)
- UOB: 118.9 (2010) to 156.9 (2016E)
- OCBC: 118.8 (2010) to 156.3 (2016E)
Earnings Growth:
- DBS: 27.0% (2010) to 29.4% (2016E)
- UOB: 26.4% (2010) to 23.5% (2016E)
- OCBC: 11.9% (2010) to 25.0% (2016E)

Valuation Summary

Cash Core EPS (cents):
- DBS: 110.0 (2010) to 212.8 (2016E)
- UOB: 160.4 (2010) to 245.2 (2016E)
- OCBC: 66.5 (2010) to 113.5 (2016E)
P/E and P/BV Ratios:
- DBS: FY14E P/E 11.3, FY15E P/E 9.6; FY14E P/BV 1.1, FY15E P/BV 1.0
- UOB: FY14E P/E 11.4, FY15E P/E 10.1; FY14E P/BV 1.1, FY15E P/BV 1.1
- OCBC: FY14E P/E 11.8, FY15E P/E 10.3; FY14E P/BV 1.3, FY15E P/BV 1.2

Conclusion

The analysis concludes that while Singapore banks have significantly increased their exposure to China, the nature of this exposure—primarily through safe short-term trade loans—suggests that the risks are manageable. The stronger loan growth and strategic focus on high-quality clients further support the positive outlook for these banks. DBS is highlighted as the top sector pick due to its stronger position in the Greater China market and benefits from interest rate hikes.