Comparison of DBS, OCBC and UOB – Third Quarter 2016

All three local banks had released their third quarter financial results for 2016.

Net Profits for the third quarter and the 9 months ended 30 September 2016 are tabled below:

Banks Q3 Profit ($m) Change (%) 9 months Profit ($m) Change (%)
DBS 1,071 0.5 3,325 -3.6
OCBC 943 4.5 2,684 -8.8
UOB 791 -7.8 2,357 -2.6

Both DBS and OCBC achieved positive growth in the third quarter performances. UOB’s third quarter results declined 7.8% over the same period in 2015.

As for 9 months results, OCBC did worst at 8.8% decline followed by DBS (-3.6%) and UOB (-2.6%).

The following table shows some key indicators for 9 months:

Banks NIM (%) NPL Ratio (%) Non-interest/ Total Income (%) ROE (%)
DBS 1.83 1.3 37.1 10.7
OCBC 1.68 1.2 39.8 10.5
UOB 1.72 1.6 38.4 10.5

Notes:
NIM = Net Interest Margin
NPL = Non-Performing Loans

In terms of net interest margin, DBS was the best performer at 1.83% followed by UOB’s 1.72% and OCBC was 1.68%.

In terms of non-performing loan ratio, UOB did poorly at 1.6% followed by DBS’ 1.3% and OCBC at 1.2%.

As for which bank obtained more businesses from non-interest income, OCBC was top at 39.8% followed by UOB’s 38.4% and DBS’ 37.1%.

In terms of return on equity (ROE), DBS was ahead at 10.7% followed by both UOB and OCBC at 10.5%.

The following table shows the Net Book Value (NAV) and the Price to Book ratio (P/B) of each bank.

Banks NAV ($)

 

Share Price ($) @ P/B Ratio
DBS 16.68 14.91 0.89
OCBC 8.31 8.51 1.02
UOB 18.54 18.76 1.01

@ Share prices were at 31 October 2016, 2.55 pm.

DBS was trading at 0.89 P/B ratio whereas OCBC’s was 1.02 and UOB’s was 1.01. DBS was really beaten down so badly compared with the other two banks.

Copyright © 2016, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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