DBS reported a 40% decline in Q4-2008 net profit to S$295mn while full year FY2008 net profit fell 15% toS$1.92bn.  Allowances for credit and other items rose 48% in Q4 and 82% for FY08 while one off item rose 31% in Q4 and declined 39% for the full year.   NPLs rose to 1.5% from 1.1% while Total Capital Adequacy was 14.0% up from 13.4%.   I am not our bank analyst and my views may differ from hers. On the surface, the results look ok but I suspect that FY2009 will be a more difficult year.  In the 1997 recession,  Singapore bank NPS rose to 11-12% and while they may not be that exposed to the property sector this time around, I believe we can expect a higher level of NPLs from corporations, personal loans and credit cards.   In 1997, the three listed Singapore banks traded to a low of 0.5 time price to book when NPLs hit double digit levels.  DBS is today according to Bloomberg trading at 0.73 times price to book.  If it trades back to 0.5 times price to book (which many believe is unlikely) - then S$5.00 would be a good level to start accumulating the stock.  DBS has never been our preferred banking stock with UOB and then OCBC in that order of preference being our choices. The charts below show the historic pattern of DBS shares, their PER and Price to Book. The price chart above shows support at S$7.60 and then S$5.00 which is similar to the 0.5 times price to book level. The DBS Bank price to book chart above shows that 0.5 times price to book is the low it achieved during the 1997 Asian Financial crisis. Source: NRA Capital - Kevin’s Blog