DBS or UOB, why not both?

FIVE months ago in April at United Overseas Bank's annual shareholder meeting, one investor lamented that the stock price had fallen behind rival DBS Group Holdings. The share price of Southeast Asia's biggest bank used to lag UOB until DBS upped its dividend early this year.

The difference - over the past five years - could sometimes be more than S$5 though that gap narrowed towards the end of last year. It was around S$2 at the beginning of 2018.

On Feb 8 when DBS unveiled its 2017 results, it delighted shareholders by announcing it would raise the annual dividend to S$1.20 per share from this year - double its payout in four of the past five years. For 2017 it paid a total of S$1.43 a share, which included a special dividend of 50 cents as a one-time return of capital buffers that had been built up and to mark the bank's 50th anniversary.