Chart of the Day: Singapore banks poised for recovery next year

10% earnings growth forecast has been penciled in.

According to DBS, Singapore banks' earnings growth is predicted to recover in 2014.

Here's more:

With NIM compression up to 1H13, and provisions normalising, coupled with weak market-related income in 3Q13, earnings growth would be miniscule in 2013.

We are looking at NIM remaining flattish up to 1H14, with a slight uptick in 2H14; loan growth at 10%; non-interest income to remain fairly strong (excluding market-related income volatilities), which collectively should lead to 10% growth in revenues.

With expenses projected to rise by 8% and provisions to be stable, we are forecasting earnings growth of 10% while ROE should average at 11.3% in 2014. ROEs for Singapore banks may not be as compelling as regional peers but it is a function of the bank’s higher capital levels.