All 3 Singapore-listed banks (in DBS, UOB, and OCBC) have already released their business update for the 3rd quarter, and for the first 9-months of the financial year 2023 ended 30 September, and I have posted reviews as and when they were made available – if you have missed out, you can check them out via the respective links below:

So, which of the 3 banks had the most resilient set of performance this time round? In this post, I will be putting the 3 banks’ results side-by-side to find out. Also, I will be comparing their current valuations (based on their current traded prices) to find out which is the ‘cheapest’, and which is the ‘most expensive’ as at lunch break this afternoon (14 November 2023).

Let’s get started…

Financial Results (Q3 FY2022 vs. Q3 FY2023)

In this section, I will be comparing the 3 banks’ results reported for the 3rd quarter in terms of their 3 business segments (in net interest income, net fee & commission income, and other non-interest income), as well as their net profit:

Net Interest Income:

DBSUOBOCBC
Net Interest
Income (S$’mil)		Up +16.0%

Q3 FY2022:
$3,020m

Q3 FY2023:
$3,504m		Up +8.7%

Q3 FY2022:
$2,234m

Q3 FY2023:
$2,429m		Up +17.0%

Q3 FY2022:
$2,099m

Q3 FY2023:
$2,456m

It was neck-to-neck between DBS and OCBC, where their net interest income grew at double-digit percentages, due to big jumps in their net interest margins (for DBS, its net interest margin jumped from 1.90% in Q2 FY2022 to 2.19% in Q3 FY2023, while for OCBC, its net interest margin rose from 2.06% in Q2 FY0222 to 2.27% in Q3 FY2023).

However, OCBC edged out here, for having a slightly better percentage improvement compared to DBS.

Net Fee & Commission Income:

DBSUOBOCBC
Net Fee &
Commission
Income (S$’mil)		Up +9.3%

Q3 FY2022:
$771m

Q3 FY2023:
$843m		Up +13.9%

Q3 FY2022:
$519m

Q3 FY2023:
$591m		Up +1.8%

Q3 FY2022:
$453m

Q3 FY2023:
$461m

UOB was the clear winner here, where the bank was the only one among the 3 to see its net fee & commission income jump by a double-digit percentage – largely due to loan-related, credit card (which hit a new record), along with wealth fees.

Other Non-Interest Income:

DBSUOBOCBC
Other
Non-Interest
Income (S$’mil)		Up +20.7%

Q3 FY2022:
$700m

Q3 FY2023:
$845m		Up +1.2%

Q3 FY2022:
$431m

Q3 FY2023:
$436m		Down -14.6%

Q3 FY2022:
$600m

Q3 FY2023:
$512m

Looking at the 3 banks’ other non-interest income recorded for the 3rd quarter, DBS is the clear-winner, where it saw a 20.7% jump compared to the same time period last year, due to higher treasury customer sales.

Net Profit:

DBSUOBOCBC
Net Profit
(S$’mil)		Up +16.0%

Q3 FY2022:
$2,236m

Q3 FY2023:
$2,593m		Down -1.5%

Q3 FY2022:
$1,403m

Q3 FY2023:
$1,382m		Up +21.4%

Q3 FY2022:
$1,605m

Q3 FY2023:
$1,810m

Finally, in terms of the 3 banks’ net profit for the 3rd quarter, OCBC’s saw the highest percentage of improvement, at +21.4%.

On the other hand, UOB’s net profit was down by 1.5% as a result of integration cost of CitiBank. Excluding it, the bank’s net profit would have been up by 5.4% – even so, the percentage improvement is also the lowest among the 3 Singapore-listed banks.

Financial Results (9M FY2022 vs. 9M FY2023)

Next, let us take a look at the 3 banks’ financial results for the first 9 months of the year (again, I will be looking at their net interest income, net fee and commission income, other non-interest income, and net profit) to find out which of them have the strongest improvement (compared to the same time period last year):

Net Interest Income:

DBSUOBOCBC
Net Interest
Income (S$’mil)		Up +33.2%

9M FY2022:
$7,661m

9M FY2023:
$10,208m		Up +25.8%

9M FY2022:
$5,783m

9M FY2023:
$7,275m		Up +35.5%

9M FY2022:
$5,302m

9M FY2023:
$7,183m

All 3 banks recorded very strong growths in their net interest income due to the high interest rate environment.

In terms of their percentage improvements, again, its a neck-to-neck between DBS and OCBC. However, OCBC’s growth in this business segment edged out.

Net Fee & Commission Income:

DBSUOBOCBC
Net Fee &
Commission
Income (S$’mil)		Up +3.6%

9M FY2022:
$2,430m

9M FY2023:
$2,517m		Up +0.5%

9M FY2022:
$1,658m

9M FY2023:
$1,666m		Down -7.5%

9M FY2022:
$1,453m

9M FY2023:
$1,344m

DBS had the highest percentage improvement in its net fee and commission income, as growth in this business segment in the 2nd and 3rd quarters more than offset a decline in the 1st quarter.

Other Non-Interest Income:

DBSUOBOCBC
Other
Non-Interest
Income (S$’mil)		Up +34.4%

9M FY2022:
$1,821m

9M FY2023:
$2,448m		Up +96.6%

9M FY2022:
$804m

9M FY2023:
$1,581m		Up +13.9%

9M FY2022:
$1,499m

9M FY2023:
$1,707m

While all 3 banks recorded improvements in their other non-interest income, UOB is the clear winner here, as it soared by 96.6%, driven by an all-time high customer-related treasury income and good performance from trading and liquidity management activities.

Net Profit:

DBSUOBOCBC
Net Profit
(S$’mil)		Up +33.2%

9M FY2022:
$5,852m

9M FY2023:
$7,793m		Up +25.9%

9M FY2022:
$3,421m

9M FY2023:
$4,308m		Up +32.2%

9M FY2022:
$4,442m

9M FY2023:
$5,399m

In terms of net profit, it was a record breaking one for DBS and OCBC. However, DBS edged out here, where its net profit was up by 33.2% compared to OCBC’s 32.2%.

Key Financial Ratios (Q2 FY2023 vs. Q3 FY2023)

Moving on, let us have a look at the 3 banks’ key financial ratios (I look at 3 of them in particular: net interest margin, return on equity, and non-performing loans ratio), where I compare the ratios recorded for the current quarter under review (i.e. Q3 FY2023 ended 30 September 2023) against the previous quarter (i.e. Q2 FY2023 ended 30 June 2023) to find out which one of them had the strongest improvements:

Net Interest Margin:

DBSUOBOCBC
Net Interest
Margin (%)		Up +0.03pp

Q2 FY2023:
2.16%

Q3 FY2023:
2.19%		Down -0.03pp

Q2 FY2023:
2.12%

Q3 FY2023:
2.09%		Up +0.01pp

Q2 FY2023:
2.26%

Q3 FY2023:
2.27%

Only UOB saw a decline in its net interest margin. However, in terms of improvements, DBS edged out OCBC, as its net interest margin was up by +0.03pp (percentage points) compared to OCBC’s +0.01pp.

However, among the 3 banks, OCBC’s net interest margin is the highest, at 2.27%.

Return on Equity:

DBSUOBOCBC
Return on
Equity (%)		Down -1.0pp

Q2 FY2023:
19.2%

Q3 FY2023:
18.2%		Down -0.2pp

Q2 FY2023:
14.1%

Q3 FY2023:
13.9%		Up +0.5pp

Q2 FY2023:
13.5%

Q3 FY2023:
14.0%

OCBC is the clear winner here as far as improvements in its return on equity is concerned, as it is the only bank that saw this financial ratio going up further.

However, among the 3 banks, DBS’ return on equity is the highest at 18.2%.

Non-Performing Loans Ratio:

DBSUOBOCBC
Non-Performing
Loans Ratio (%)		Up +0.1pp

Q2 FY2023:
1.1%

Q3 FY2023:
1.2%		Unchanged

Q2 FY2023:
1.6%

Q3 FY2023:
1.6%		Down -0.1pp

Q2 FY2023:
1.1%

Q3 FY2023:
1.0%

OCBC is the only one out of the 3 Singapore banks to see an improvement in its non-performing loans ratio, where it fell from 1.1% in Q2 FY2023 to 1.0% in Q3 FY2023, driven by declines across key markets of Singapore, Malaysia, Indonesia, as well as in Greater China.

Also, at 1.0%, OCBC has the lowest non-performing loans ratio among the 3.

Which Bank Had the Most Resilient Performance in Q3 and 9M FY2023?

I would say OCBC is the ‘winner’ this time round – where the bank recorded the strongest improvement in the 3rd quarter (particularly, its net interest income and net profit, in terms of its percentage improvement was the highest). Also, OCBC’s key financial ratios recorded the most growth as well (for having the highest net interest margin, strongest growth in its return on equity for the 3rd quarter, and its non-performing loans ratio being the lowest at just 1.0%).

Which Bank is Currently the ‘Cheapest’, and ‘Most Expensive’?

The table below is a side-by-side comparison of the 3 banks’ current valuations based on their current traded prices as at lunch break today (14 November 2023):

DBSUOBOCBC
Share Price (S$)$32.60$27.32$12.90
P/E Ratio8.517.357.81
P/B Ratio1.431.001.12
Dividend Yield^^6.1%4.9%5.3%
^^ – The dividend yields were computed based on the respective dividend payouts of the 3 banks in FY2022, as follows: 200.0 cents for DBS [the amount is inclusive of a 50.0 cents of special dividend declared in Q4 FY2022], 135.0 cents for UOB, and 68.0 cents for OCBC.

Looking at the valuations of the 3 banks, UOB is currently the ‘cheapest’ as its P/E and P/B ratios are currently the lowest. At the other end, DBS is the ‘most expensive’ as its P/E and P/B ratios are the highest.

Closing Thoughts

The 3rd quarter, as well as the first 9 months of the financial year 2023 was a record breaking one for both DBS and OCBC – for DBS, its total income and profit before allowances for the 3rd quarter and for the first 9 months of the year, as well as its net profit for the first 9 months of the year are new records for the bank; for OCBC, its net interest income for the 3rd quarter was a record high, its net fee and commission income for the 3rd quarter was the highest in the past 4 quarters, and its total income and net profit for the first 9 months of the year broke the $10 billion and $5 billion mark for the first time respectively.

However, OCBC’s results was the most resilient this time round – as the bank’s financial results for the 3rd quarter recorded the strongest improvement. The same can also be said for its key financial ratios (for the 3rd quarter compared against the 2nd quarter of FY2023).

In terms of the 3 banks’ valuations (based on their traded prices at lunch break today, 14 November 2023), UOB is the ‘cheapest’, whereas DBS is the ‘most expensive’.

Finally, as to why there are no dividend comparisons, the reason is because only DBS pays out a dividend to its shareholders once every quarter, while UOB and OCBC pays out a dividend to its shareholders on a half-yearly basis.

That concludes my comparison of the 3 Singapore banks’ business updates for the 3rd quarter, as well as for the first 9 months of FY2023. As always, hope you’ve found the contents presented above useful. Also, do take note that everything you have just read above are for educational purposes only, and you should always do your own due diligence before you make any investment decisions.

Disclaimer: At the time of writing, I am a shareholder of DBS, UOB, and OCBC.

Are You Worried about Not Having Enough Money for Retirement?

You're not alone. According to the OCBC Financial Wellness Index, only 62% of people in their 20s and 56% of people in their 30s are confident that they will have enough money to retire.

But there is still time to take action. One way to ensure that you have a comfortable retirement is to invest in real estate investment trusts (REITs).

In 'Building Your REIT-irement Portfolio' which I've authored, you will learn everything you need to know to build a successful REIT investment portfolio, including a list of 9 things to look at to determine whether a REIT is worthy of your investment, 1 simple method to help you maximise your returns from your REIT investment, 4 signs of 'red flags' to look out for and what you can do as a shareholder, and more!

You can find out more about the book, and grab your copy (ebook or physical book) here...