Singapore's big three banks averaged total return of 12% YTD

DBS, OCBC and UOB have averaged an 8% YTD growth in net profit to a combined $11.85b.

DBS Group (DBS), Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB) have posted an average total return of 12% YTD and 5% in Q3, outpacing the 7% YTD average total returns of Asia Pacific’s largest 100 capitalised banks, according to an SGX report.

The three banks have averaged an 8% YTD growth in net profit to a combined $11.85b, led by DBS at 13%. This is followed by UOB at 8% and OCBC at 2%. In addition, their average annualised ROE all together is 12.4% YTD, as compared to 11.6% for FY18.

Their average annualised total returns was 8%, which outpaced the median return for the 100 largest capitalised banks of the region and the world.

Over the five-year period, the three banks all grew their net interest income. SGX noted that in the Q3 2014 period, the combined net interest income of the three banks was $4b, which had gradually grown to $5.7b in Q3 2019.

They have also generated a 13% YoY growth in 9M wealth management income, whilst averaging annualised 9M NIM of 1.82%, up 3 bps YoY.

In addition, its average dividend yield is at 4.2%. The average price-to-book (P/B) of the three banks is currently 1.2x, which ranges from 1.1x for OCBC to 1.4x for DBS. By comparison the five year average P/B ratio for the three banks is also 1.2x with the average P/B of the three banks at 1.4x five years ago.

Their average net interest margin (NIM) for the three banks YTD was 1.82%, up 3 basis points from 1.79% in 9MFY18.