Why Singapore Banks Have Performed Strongly
Singapore banks have been the prime beneficiaries of higher interest rates (in recent years), which have bolstered their net interest margins (NIMs). NIMs refer to the interest rate spread between what the banks charge to borrowers and what they pay on deposits. The NIM is the core metric that determines how much net interest income (NII) a bank earns. Higher NII earned in recent years has also strengthened the banks’ capital positions....The Singapore stock market’s three local banks, DBS Group Holdings (SGX: D05), Oversea-Chinese Banking Corporation (SGX: O39), and United Overseas Bank (SGX: U11) have long been staple holdings of Singaporean investors.
Owning these banks gives investors exposure to Singapore and the surrounding regional Asian economies.
All three have been posting solid earnings and rewarding shareholders with good dividends.
Given the strong rally in their stock prices in recent years, do they still present a value buy at these prices?
Let’s find out.
