All 3 Singapore-listed banks (in DBS, UOB, and OCBC) have since reported its results for the fourth quarter, as well as for the financial year ended 31 December 2021 (i.e. FY2021.)
As I am a shareholder of all 3 Singapore banks, I have posted my review on their results when they were published, and in case you’ve missed out, you can read about them by clicking on the respective links below:
In this post, I’ll be putting the 3 banks’ key financial results, financial ratios, as well as dividend payouts side-by-side to find out which bank displayed the strongest set of results this time round. Not only that, you’ll also find out which Singapore bank is currently the “cheapest” based on their current valuations.
Let’s begin:
Financial Performance (Q4 FY2020 vs. Q4 FY2021)
First up, let us take a look at which bank recorded the strongest percentage growth in terms of its financial performance on a quarter-on-quarter (q-o-q) basis (I will bold the bank that has the best results for each financial metric that I look at):
| DBS | UOB | OCBC | |
| – Net Interest Income | +0.9% growth Q4 FY2020: $2,120m Q4 FY2021: $2,140m | +11.0% growth Q4 FY2020: $1,512m Q4 FY2021: $1,677m | +3.9% growth Q4 FY2020: $1,436m Q4 FY2021: $1,492m |
| – Net Fee & Commission Income | +9.1% growth Q4 FY2020: $747m Q4 FY2021: $815m | +12.8% growth Q4 FY2020: $522m Q4 FY2021: $589m | +2.1% growth Q4 FY2020: $517m Q4 FY2021: $528m |
| – Other Non- Interest Income | -14.6% decline Q4 FY2020: $396m Q4 FY2021: $338m | -21.5% decline Q4 FY2020: $214m Q4 FY2021: $168m | -0.4% decline Q4 FY2020: $532m Q4 FY2021: $530m |
| Total Income | +0.9% growth Q4 FY2020: $3,263m Q4 FY2021: $3,293m | +8.2% growth Q4 FY2020: $2,249m Q4 FY2021: $2,434m | +2.6% growth Q4 FY2020: $2,485m Q4 FY2021: $2,550m |
| Net Profit | +37.3% growth Q4 FY2020: $1,012m Q4 FY2021: $1,389m | +47.8% growth Q4 FY2020: $688m Q4 FY2021: $1,017m | -14.0% decline Q4 FY2020: $1,131m Q4 FY2021: $973m |
Personally, I must say that all 3 Singapore banks have reported a pretty strong fourth quarter results this year (compared to the same time period last year.) The only financial metric that saw all 3 banks recording a q-o-q decline is its other non-interest income.
In terms of its percentage growth, it is obvious from the table above that UOB is a clear winner here – where it came out on top in terms of having the highest growth in its net interest income, net fee and commission income, total income, and net profit.
Financial Performance (FY2020 vs. FY2021)
Moving on, let us put the key financial performances reported by the 3 Singapore banks for the full-year of 2021 side-by-side (in terms of its percentage growth/decline compared to last year) in the table below (again, I’ve bold the bank with the best performance for each financial statistic):
| DBS | UOB | OCBC | |
| – Net Interest Income | -7.0% decline FY2020: $9,076m FY2021: $8,440m | +5.8% growth FY2020: $6,035m FY2021: $6,388m | -1.9% decline FY2020: $5,966m FY2021: $5,855m |
| – Net Fee & Commission Income | +15.2% growth FY2020: $3,058m FY2021: $3,524m | +20.8% growth FY2020: $1,997m FY2021: $2,412m | +12.1% growth FY2020: $2,003m FY2021: $2,245m |
| – Other Non- Interest Income | -5.1% decline FY2020: $2,458m FY2021: $2,333m | -11.1% decline FY2020: $1,114m FY2021: $990m | +15.0% growth FY2020: $2,170m FY2021: $2,496m |
| Total Income | -2.0% decline FY2020: $14,592m FY2021: $14,297m | +6.7% growth FY2020: $9,176m FY2021: $9,789m | +4.5% growth FY2020: $10,139m FY2021: $10,596m |
| Net Profit | +44.1% growth FY2020: $4,721m FY2021: $6,801m | +39.8% growth FY2020: $2,915m FY2021: $4,075m | +35.5% growth FY2020: $3,586m FY2021: $4,858m |
On a full-year basis, apart from its net interest income, I have to say that all 3 banks’ had a pretty decent set of results (compared to last year, where their financial performance were adversely affected by the pandemic due to lockdowns implemented to slow down the transmission of the virus in the community.)
However, if I were to look at the percentage growth of the financial statistics, UOB is once again the winner – where the bank had the highest percentage growth in its net interest income, net fee and commission income, and also in its total income.
Key Financial Ratios (Q3 FY2021 vs. Q4 FY2021)
Moving on, let us take a look at the 3 banks’ key financial ratios – where in this section, we’ll be looking at their gains/declines by percentage points (pp) for the current quarter under review (i.e. Q4 FY2021 ended 31 December 2021) against the previous quarter 3 months ago (i.e. Q3 FY2021 ended 30 September 2021.) Again, I’ve highlighted the bank with the best result for each financial ratio in bold:
| DBS | UOB | OCBC | |
| Net Interest Margin | +0.0pp Q3 FY2021: 1.43% Q4 FY2021: 1.43% | +0.1pp gain Q3 FY2021: 1.55% Q4 FY2021: 1.56% | +0.0pp Q3 FY2021: 1.52% Q4 FY2021: 1.52% |
| Return on Assets | -0.2pp decline Q3 FY2021: 1.01% Q4 FY2021: 0.81% | -0.02pp decline Q3 FY2021: 0.93% Q4 FY2021: 0.91% | -0.25pp decline Q3 FY2021: 1.13% Q4 FY2021: 0.88% |
| Return on Equity | -2.2pp decline Q3 FY2021: 12.1% Q4 FY2021: 9.9% | -0.2pp decline Q3 FY2021: 10.4% Q4 FY2021: 10.2% | -2.0pp decline Q3 FY2021: 9.5% Q4 FY2021: 7.5% |
| Non-Performing Loans Ratio | +0.2pp gain Q3 FY2021: 1.5% Q4 FY2021: 1.3% | -0.1pp decline Q3 FY2021: 1.5% Q4 FY2021: 1.6% | +0.0pp Q3 FY2021: 1.5% Q4 FY2021: 1.5% |
Compared to the previous quarter, some of the financial ratios reported by the 3 Singapore banks declined slightly.
But despite of that, UOB still emerged the winner here for being the only bank to see an improvement in its net interest margin (albeit slightly), and at the same time, recording the smallest percentage point of decline in its return on assets as well as in its return on equity.
Key Financial Ratios (FY2020 vs. FY2021)
Next, let us take a look at the 3 banks’ key financial ratios on a y-o-y basis – where I’ll be taking the ratios reported for the current financial year under review against that reported in the previous financial year, to find out its percentage point (pp) gain/decline. Also, I’ll be bolding the bank with the best gain/least decline in its financial ratios:
| DBS | UOB | OCBC | |
| Net Interest Margin | -0.17pp decline FY2020: 1.62% FY2021: 1.45% | -0.01pp decline FY2020: 1.57% FY2021: 1.56% | -0.07pp decline FY2020: 1.61% FY2021: 1.54% |
| Return on Assets | +0.27pp gain FY2020: 0.75% FY2021: 1.02% | +0.23pp gain FY2020: 0.69% FY2021: 0.92% | +0.28pp gain FY2020: 0.85% FY2021: 1.13% |
| Return on Equity | +3.4pp gain FY2020: 9.1% FY2021: 12.5% | +3.1pp gain FY2020: 7.1% FY2021: 10.2% | +2.0pp gain FY2020: 7.6% FY2021: 9.6% |
| Non-Performing Loans Ratio | +0.3pp gain FY2020: 1.6% FY2021: 1.3% | +0.00pp FY2020: 1.6% FY2021: 1.6% | +0.0pp FY2020: 1.5% FY2021: 1.5% |
Compared to last year, all 3 banks saw improvements in terms of its financial ratios, apart from its net interest margin – as they were still negatively impacted with the Fed continuing to keep interest rates for now. However, as the economy gradually recovers from the Covid-19 pandemic, the Fed has signalled that interest rates will be hiked by 3 times this year (2022), and another 3 times the next (2023) – with the first hike to be announced in its next meeting in March 2022.
Looking at the improvements in terms of the 3 banks’ financial ratios on a y-o-y basis, DBS edged out here, where it had the best improvements in its return on equity, as well as in its non-performing loans ratio.
Dividend Payouts
All 3 banks’ saw their dividend payouts improved significantly when compared to last year, as banks were once again allowed to resume their dividend payouts to their shareholders.
However, when compared against FY2019, which was before the pandemic, only UOB increased its dividend payout – from 110.0 cents/share in FY2019 (if you strip out the 20.0 cents/share of special dividend paid out in the financial year) to 120.0 cents/share in FY2021 – a gain by 9.1%.
On the other hand, DBS’ dividend payout when compared against that paid out in FY2019 still saw a 2.4% decline (from 123.0 cents/share in FY2019 to 120.0 cents/share in FY2021), while OCBC’s dividend payout for FY2021 was the same as what it had paid out in FY2019 – at 53.0 cents/share.
So, UOB again emerged the winner among the 3 banks as far as improvements in its dividend payouts is concerned.
Which Singapore-Listed Bank is Currently the “Cheapest”?
The following table are the 3 banks’ current valuations based on their current traded prices at the time of writing:
| DBS | UOB | OCBC | |
| Share Price | $36.60 | $32.43 | $12.64 |
| P/E Ratio | 13.97 | 16.80 | 12.00 |
| P/B Ratio | 1.63 | 1.30 | 1.18 |
| Dividend Yield ** | 3.3% | 3.7% | 4.2% |
Looking at the 3 banks’ current valuations from the table above, it seems that OCBC is the “cheapest” – with its P/E and P/B ratios being the lowest among the 3 banks, along with its dividend yield being the highest.
In Conclusion
As far as its financial results and financial ratios are concerned – both on a q-o-q, as well as on a y-o-y basis, it is clear that UOB is the winner this time round – where its results, when put together with the other 2 banks, recorded the most growth.
Also, OCBC is currently the “cheapest” among the 3 Singapore-listed banks in terms of their current valuations.
That said, the contents in this post is meant solely for educational purposes only. They do not represent any buy or sell recommendations for any of the 3 banks’ shares. You’re strongly advised to do your own due diligence before you make any investment decisions.
Disclaimer: At the time of writing, I am a shareholder of DBS Group Holdings Limited, United Overseas Bank Limited, and Overseas-Chinese Banking Corporation Limited.
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