The trio of local banks – DBS, OCBC and UOB, are major components of Singapore’s economy. Not only are they the biggest market-capitalisation companies in the stock market, occupying the largest weightage in the Straits Times Index, the three local banks are also among the safest banks in the world. Global Finance ranked DBS, OCBC and UOB among the world’s top 15 safest banks in 2017.
Banks have large asset base, comprising of deposits, loans and assets under management. Being in the heavily-regulated financial industry with many liquidity, credit risk and interest risk requirements, their financial statements can be complicated to analyse, peppered with financial jargon.
So in this article, I would like to share 5 metrics that I usually look at while analysing banks. These are important numbers particularly relevant to the banking industry that provides good indication of a bank’s strength and operation efficiency.
Firstly, let’s understand what …