I often get asked which is the best Singapore bank stock to buy, and what is the difference between the 3.
All 3 banks pay about 6%ish dividends, but is there any difference between OCBC, UOB and DBS Bank?
And which offers the most attractive risk-reward in today’s market?
Let’s dive in.
Valuation Metrics for DBS vs OCBC vs UOB Bank – DBS as the most “expensive”?
Let’s start high level with valuations.
I’ve compiled the valuation metrics for
DBS Bank,
OCBC Bank and
UOB Bank below:
| Metric |
DBS Bank |
OCBC Bank |
UOB Bank |
| Price / Book |
2.09× |
1.22× |
1.14× |
| Return on Equity |
16.7% |
12.6% |
11.0% |
| Net Interest Margin |
2.05% |
1.98% |
1.91% |
| CET1 ratio |
17.0% |
17.0% |
15.3% |
| Non Performing Loan ratio |
1.0% |
0.9% |
1.6% |
Long story short –
DBS Bank is the best performing bank of the 3.
16.7% ROE is miles above OCBC Bank and UOB Bank.
And net interest margin at 2.05% is also comfortably higher.
The drawback – much of this is already priced in, as DBS Bank trades at a record high 2.09x Price/Book, vs...
