Brokers' take

DBS Bank | HOLD Target price: S$22.40 Sept 5 close: S$20.69 OCBC Research, Sept 5

DBS announced it has secured approval from the Reserve Bank of India to convert its Indian franchise into a wholly owned unit. DBS intends to open about 75 to 90 branches in India in the coming years.

We expect this move to be long-term positive for DBS as it strengthens its presence in this market. Indian banks such as State Bank of India and HDFC Bank have seen significant jump in market capitalisation in the past few years. For example, HDFC's market capitalisation grew by a compound annual growth rate (CAGR) of 27 per cent from FY2014 to FY2017, while its net income grew from 87.4 billion rupees (S$1.84 billion) in FY2014 to 152.5 billion rupees in FY2017 or a CAGR of 20 per cent.