Company Name: DBS GROUP HOLDINGS LTD
| Research House: UOB KayHian | Price Call: BUY | Target Price: 19.50 |
UOB Kay Hian raised its target price on DBS Group Holdings, Southeast Asia’s largest bank, to S$19.50 from S$16.20 and maintained its buy rating.
As of 10:25 a.m. on Monday, DBS shares were down 0.4% at $13.94, but have risen more than 21% this year.
UOB Kay Hian raised its 2012 net profit forecast for DBS by 18.8%, citing net interest margin (NIM) improvements and lower credit costs, and projected its non-performing loan ratio to reach 1.4%, down from 1.8%, by year-end.
UOB Kay Hian said DBS planned to deploy surplus deposits in Singapore to expand consumer and small and medium-sized enterprise businesses to bolster loan growth and NIM.
Higher interest rates would also give DBS a huge boost because of its significant exposure to interbank lending and huge base of low-cost current and savings accounts, UOB added.
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