Hot stocks: Shares of DBS, OCBC rise over 3% after announcing Q1 results, UOB down 3.1%
Corinne Kerk
SHARES of the 3 local banks saw active trading on Friday (Apr 29) morning after they all announced a 10 per cent drop in their net profit for the first quarter ended Mar 31, 2022.
At 9 am, DBS shares were up as much as 4.3 per cent or S$1.41 at S$34.42 with 814,400 shares changing hands.
At 9.18 am, OCBC shares rose 3.7 per cent or S$0.44 to a high of S$12.40 with 3.8 million shares traded.
As for UOB , its shares fell as much as 3.1 per cent or S$0.94 to S$29.20 at 9 am, with 718,600 shares traded.
One married deal was recorded for DBS, with 6,500 shares changing hands at S$32.957 at 8.30 am, according to ShareInvestor data.
OCBC also recorded a married deal at the same time, with 150,000 shares traded at S$11.96.
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There were no married deals recorded for UOB.
As at noon, DBS shares have eased to S$34, up 3 per cent or S$0.99 on a volume of 3.6 million shares.
Similarly, OCBC shares were trading at S$12.36, up 3.3 per cent or S$0.40 with 9.9 million shares changing hands.
Meanwhile, UOB recovered slightly to trade at S$29.78, down 1.2 per cent or S$0.36 on a volume of 4.4 million shares.
The trio of banks all posted their first quarter results on Friday. DBS reported a net profit of S$1.8 billion, down 10 per cent from the record S$2.1 billion posted a year ago, which it attributed to a high base for wealth management and treasury markets activities a year ago.
Meanwhile, OCBC posted S$1.36 billion in net profit, 10 per cent lower than the record earnings of S$1.5 billion a year ago, as the bank's wealth management fees, trading income and life insurance profit slipped.
As for UOB, it reported that Q1 net profit fell 10 per cent on year to S$906 million, as total income was impacted by market volatility.
Eugene Tarzimanov, vice-president, financial institutions group at Moody’s Investors Service, said the banks maintained solid credit fundamentals in Q1, in line with the credit rating agency’s stable outlook on the sector.
“Net income at DBS and OCBC surged more than 30 per cent from the previous quarter on margin expansion and low credit allowances. We expect profitability to increase further as upcoming interest rate rises will boost margins. A key risk to our stable credit view is a potential surge in inflationary pressure.”
DBS’s Q1 results were in line with OCBC Investment Research’s expectations, for which it has a “buy” call and a fair value of S$40, representing a potential upside of 17.6 per cent from the noon closing price.
Jefferies analyst, Krishna Guha, has a target price of S$32 for the bank, representing a potential downside of 5.9 per cent.
His target price for OCBC is S$12.50, implying a potential upside of 1.1 per cent from the noon closing price. Citi Research had a “buy” call for OCBC, with a target price of S$14, representing an upside of 13.3 per cent.
For UOB, Guha’s target price is S$32, or a potential upside of 7.5 per cent, while OCBC has a “buy” call for UOB and a fair value of S$36.50, implying a potential upside of 22.6 per cent from the noon closing price.
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