SG Banks 2022 Outlook Prospect of higher interest rates wil | FSMOne SG - Research Highlights

SG Banks 2022 Outlook

Prospect of higher interest rates will be a major catalyst for Singapore banks in 2022

——————————————————

• The Fed may kick-start its rate hike cycle in 2022 and we believe Singapore banks will be one of the main beneficiaries as a huge chunk of the banks’ revenue still come from net interest income.

• Loan growth is expected to continue in 2022, a factor that will boost net interest income.

• The three local banks’ fee income, particularly wealth management fees, will remain as a major earnings driver going forward.

• The Singapore banks’ strong capital positions will continue to support higher dividends and allow them to make potential acquisitions. 

• The Singapore banks have proven to be resilient during market downturns. We believe that they will be able to ride on the economic recovery in 2022 even as risks from the Omicron variant are starting to build. 

• Based on their fair PB ratios, we can expect an upside potential of about 15% on average and a dividend yield of approximately 5% per annum. 

: Read the full article here
: DBS (SGX:D05), UOB (SGX:U11), OCBC (SGX:O39)