DBS top pick among Singapore banks: Maybank
For 2 reasons that can't be overlooked.
According to Maybank Kim Eng, DBS is the top sector pick, beating out OCBC and UOB, because of its SGD liquidity and deposit strength.
"With interest rates poised to rise, it stands out as the clear-cut beneficiary given its most liquid SGD balance sheet and strongest deposit franchise," said the research firm.
DBS was the most liquid with SGD loan-to-deposit ratio (LDR) of 75% as at end-Dec 2013 and UOB the least liquid at 95%, data showed.
DBS also had the strongest deposit franchise, distinguished by a significantly higher proportion of cheaper funding sources such as current and savings accounts or CASA.
Rivals are also giving additional causes for investment worry, such as OCBC's worrisome purchase of Wing Hang Bank.
"We remain cautious on OCBC despite the stock’s cheap valuation, as share price weakness may persist, with downside bias, amid uncertainty over the pricing and funding structure of its proposed purchase of Wing Hang Bank," said Maybank.
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