Hi Bro

Thanks for sharing.

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This post has been edited by prophetjul: May 24 2019, 03:11 PM

Think you gotta decide your own price.

http://www.thesingaporeaninvestor.com/2019...-you-invest-in/

I’m sure you’ve seen a question like this pretty often, “Between the 3 Singapore banks, if you only have money to invest in just one of them, which one should you invest in?”

Other than looking at the current share price movements of the 3 banks, you should also look at the bank’s financial performances over the past couple of years first before making your decision.

In my most recent posts, I have reviewed each of the 3 banks individually – if you have not read them yet, you can check them out by clicking on the respective bank names: DBS | UOB | OCBC

What I’ll be doing in this post is that I’ll be putting the 3 banks’ financial numbers (over the past 5 financial years – from FY2014 to FY2018) side by side, and compare them based on their compound annual growth rate (also known as CAGR for short), and finally, I’ll be looking at the banks’ share prices and current valuations, and do a comparison also to find out at this point in time, which bank is the cheapest.

Are you ready? Let’s begin!

Net Interest Margin (in S$’bil):

FY2014 FY2015 FY2016 FY2017 FY2018 CAGR
DBS S$6.32b S$7.10b S$7.31b S$7.79b S$8.96b 7.23%
UOB S$4.56b S$4.93b S$4.99b S$5.53b S$6.22b 6.41%
OCBC S$4.74b S$5.19b S$5.05b S$5.42b S$5.89b 4.44%
DBS has the highest CAGR (at 7.23%) in terms of their Net Interest Income growth over the years, followed by UOB, and then OCBC.

Net Fee and Commission Income (in S$’bil):

FY2014 FY2015 FY2016 FY2017 FY2018 CAGR
DBS S$2.03b S$2.14b S$2.33b S$2.62b S$2.78b 6.49%
UOB S$1.75b S$1.88b S$1.93b S$1.87b S$1.97b 2.40%
OCBC S$1.50b S$1.64b S$1.64b S$1.95b S$2.03b 6.24%
Other Non-Interest Income (in S$’bil):

Again, DBS has emerged on top for its Net Fee and Commission Income growth, with a CAGR of 6.49%, followed by OCBC and finally UOB.

FY2014 FY2015 FY2016 FY2017 FY2018 CAGR
DBS S$1.27b S$1.56b S$1.85b S$1.51b S$1.45b 2.69%
UOB S$1.15b S$1.24b S$1.14b S$1.16b S$0.93b -4.16%
OCBC S$2.11b S$1.89b S$1.80b S$2.15b S$1.78b -3.34%
DBS is the only bank with a positive CAGR growth for its Other Non-Interest Income over the years.

Total Income (in S$’bil):

FY2014 FY2015 FY2016 FY2017 FY2018 CAGR
DBS S$9.62b S$10.80b S$11.49b S$11.92b S$13.18b 6.50%
UOB S$7.46b S$8.05b S$8.06b S$8.56b S$9.12b 4.29%
OCBC S$7.95b S$8.72b S$8.49b S$9.53b S$9.70b 2.78%
DBS has the highest CAGR when it comes to Total Income growth over the years – at 6.50%. UOB came in second at 4.10% and OCBC came in third at 4.06%.

Net Profit After Tax (in S$’bil):

FY2014 FY2015 FY2016 FY2017 FY2018 CAGR
DBS S$4.05b S$4.45b S$4.24b S$4.37b S$5.58b 6.62%
UOB S$3.25b S$3.21b S$3.10b S$3.39b S$4.01b 4.29%
OCBC S$4.08b S$4.11b S$3.65b S$4.30b S$4.68b 2.78%
DBS emerged on top for its Net Profit After Tax growth, followed by UOB, and then OCBC.

Return on Equity:

FY2014 FY2015 FY2016 FY2017 FY2018
DBS 10.9% 11.2% 10.1% 9.7% 12.1%
UOB 12.3% 11.0% 10.2% 10.2% 11.3%
OCBC 13.2% 12.3% 10.0% 11.0% 11.5%
Non-Performing Loans:

FY2014 FY2015 FY2016 FY2017 FY2018
DBS 0.9% 0.9% 1.4% 1.7% 1.5%
UOB 1.2% 1.4% 1.5% 1.8% 1.5%
OCBC 0.6% 0.9% 1.3% 1.5% 1.5%
Total Dividend Payout:

The following are the 3 banks’ Total Dividend Payout to shareholders over the years:

FY2014 FY2015 FY2016 FY2017 FY2018 CAGR
DBS 58 cents 60 cents 60 cents 143 cents 120 cents 15.65%
UOB 75 cents 90 cents 70 cents 100 cents 120 cents 9.86%
OCBC 36 cents 36 cents 36 cents 37 cents 43 cents 3.42%
DBS again emerged on top in terms of its CAGR in dividend growth at 15.65%, followed by UOB, and then OCBC.

Current Share Prices and Valuations:

The following at the current share prices (at the time of writing), along with their valuations:

Current Price P/E Ratio P/B Ratio Dividend Yield
DBS S$24.89 10.4 1.2 4.8%
UOB S$24.74 9.7 1.0 4.9%
OCBC S$10.84 10.0 1.0 4.0%
In terms of P/E Ratio, UOB has the lowest P/E Ratio (at 9.7), followed by OCBC and finally DBS.

In terms of P/B Ratio, UOB and OCBC have the lowest P/B Ratio (at 1.0), followed by DBS.

And finally, in terms of their respective Dividend Yields, UOB have the highest dividend yields (at 4.9%), followed by DBS, and then OCBC.

In Conclusion:

While DBS has the highest CAGR in terms of their financial results over the years, but in terms of its current price and valuation, it is also the most expensive of the 3 banks, with UOB being the cheapest.

Technically, already broke the last support of 131.

May head down further. The previous low as at 126

Catching a dropping knife?

Or wait for a confirmed bottom now that the last low is broke?

Price has broke through the 50% Fib retracement of 127.5.

Now looking at 61.8% of 122.9

I use TA only to forecast the falling knives!

This one has broke a few key levels.

Think it contributes substantially to its bottom line like concentration risk of Festival Walk, which contributes 62.0% of the REIT’s net property income.

SGD behaves a lot like the Swiss Franc. Stable

So why is your target price $15?

Sounds like a crash price if anything.

Are you applying the same rationale to ALL stocks?

Thanks for sharing on ABF bonds.

I have held and traded gold since 2002. Without dividends and just holding and doing nought, my gold CAGR is 12% in MYR terms. So pretty good for doing nothing with it.

But this ABF bonds looks interesting.

My approach to SGD is different. I am not willing to invest in SGD assets with a return of a meagre 1.5 to 2%. I looked at the ABFSG price trend over the years. The returns is quite awful

The reward/risk with SREITs beats this ETF hands down.

Anyone watching China market opening?

Broke like hot knife thro butter!

Yes. Will be like 2016 all over again, with oil companies under stress. Except this time round, the expansion is lesser than that of the crazy 2014 years.

That's good advice.

DBS at $10 will be nice!

Hindsight is...……..

Yes. That's the deal.