2024-07-15 08:00:00 ET
Summary
- DBS Group has performed well with above-market loan growth, solid underwriting quality, and good execution on fee-generating operations like wealth management.
- Singapore offers modest loan growth prospects today, but mortgage and corporate loan demand could pick up later in the year; India and Indonesia continue to perform well for DBS.
- Credit performance has exceeded management expectations; Hong Kong CRE remains a risk, but management has stress-tested and reserved against the portfolio.
- I expect a "steady as she goes" approach from management, with some possible bolt-on M&A to support growth in wealth management, payments, and digital banking.
- Mid-single-digit core earnings growth and mid-teens ROTCE can support a share price about 10% above today's level.
I’ve been quite complimentary regarding the management of Singapore’s DBS Group Holdings ( OTCPK:DBSDY ) ( OTCPK:DBSDF ) for many years now, and the performance over the last 18 months or so since my last update has continued to support those feelings. Between decent loan growth and yield management, solid underwriting, and good execution on fee-generating operations like wealth management, the business has continued to perform well relative to expectations....
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DBS Group Offers Ongoing Excellence And Ongoing Opportunities