All 3 Singapore-listed banks (in DBS, UOB, and OCBC) have already reported their business update for the first quarter of FY2024 ended 31 March – you can read about the individual bank’s results in detail here.

Just like in the previous quarters, I will be putting the 3 banks’ financial figures, and key financial ratios side-by-side to do a comparison to find out which had the best set of results.

Additionally, I will also seek to find out which of the 3 banks is currently the ‘cheapest’, as well as the ‘most expensive’ in terms of their current valuations (based on their share prices as at market close on 10 May 2024).

Let’s begin:

Financial Results (Q1 FY2023 vs. Q1 FY2024)

Net Interest Income:

DBSUOBOCBC
Net Interest
Income		Up +7.2%

Q1 FY2023:
S$3,271m

Q1 FY2024:
S$3,505m		Down -2.0%

Q1 FY2023:
S$2,409m

Q1 FY2024:
S$2,362m		Up +4.2%

Q1 FY2023:
S$2,338m

Q1 FY2024:
S$2,437m

UOB was the only one out of the 3 banks that saw a decline in its net interest income (due to its net interest margin falling by 0.12 percentage points).

Between DBS and OCBC, the former had a stronger growth in terms of its net interest income, which was up by 7.2%, compared to an increase by 4.2% recorded by the latter.

Net Fee & Commission Income:

DBSUOBOCBC
Net Fee &
Commission
Income		Up +22.6%

Q1 FY2023:
S$851m

Q1 FY2024:
S$1,043m		Up +5.1%

Q1 FY2023:
S$552m

Q1 FY2024:
S$580m		Up +5.7%

Q1 FY2023:
S$453m

Q1 FY2024:
S$479m

While all 3 banks saw improvements in their net fee and commission income, but the obvious winner here is DBS – where it jumped by 22.6%. It is also the first time the bank’s net fee and commission income surpassed the S$1 billion mark.

Other Non-Interest Income:

DBSUOBOCBC
Other
Non-Interest
Income		Up +24.0%

Q1 FY2023:
S$814m

Q1 FY2024:
S$1,009m		Up +3.2%

Q1 FY2023:
S$563m

Q1 FY2024:
S$581m		Up +27.0%

Q1 FY2023:
S$559m

Q1 FY2024:
S$710m

It was a “close call” between DBS and OCBC – however, the latter edged out; the jump in OCBC’s other non-interest income can be attributed to its trading income rising to a quarterly high, along with profits from insurance (i.e., Great Eastern Holdings Limited).

Net Profit:

DBSUOBOCBC
Net ProfitUp +14.8%

Q1 FY2023:
S$2,571m

Q1 FY2024:
S$2,951m		Down -1.6%

Q1 FY2023:
S$1,511m

Q1 FY2024:
S$1,487m		Up +5.5%

Q1 FY2023:
S$1,879m

Q1 FY2024:
S$1,982m

Similar to the 3 banks’ net interest income, UOB was the only bank that saw its net profit declined.

Among the other 2 banks, DBS is a clear winner here, with its net profit growing at a double-digit percentage. Also, its net profit of S$2,951m was a record for the bank.

Key Financial Ratios (Q4 FY2023 vs. Q1 FY2024)

Net Interest Margin:

DBSUOBOCBC
Net Interest
Margin		Up +0.01pp

Q4 FY2023:
2.13%

Q1 FY2024:
2.14%		Unchanged

Q4 FY2023:
2.02%

Q1 FY2024:
2.02%		Down -0.02pp

Q4 FY2023:
2.29%

Q1 FY2024:
2.27%

DBS was the only bank that saw a further growth in its net interest margin. However, among the 3 banks, OCBC had the highest net interest margin, at 2.27%, even though it suffered a slight drop (as a rise in asset yields was outpaced by higher funding costs).

Return on Equity:

DBSUOBOCBC
Return on
Equity		Up +3.3pp

Q4 FY2023:
16.1%

Q1 FY2024:
19.4%		Up +0.2pp

Q4 FY2023:
13.8%

Q1 FY2024:
14.0%		Up +2.3pp

Q4 FY2023:
12.4%

Q1 FY2024:
14.7%

All 3 banks saw an improvement in their return on equity compared to the previous quarter 3 months ago – however, DBS is the winner here for not only having the highest improvement, but its return on equity is also the highest among the 3 banks (for information, DBS’ return on equity for Q1 FY2024 is another new record for the bank).

Non-Performing Loans Ratio:

DBSUOBOCBC
Non-Performing
Loans Ratio		Unchanged

Q4 FY2023:
1.1%

Q1 FY2024:
1.1%		Unchanged

Q4 FY2023:
1.5%

Q1 FY2024:
1.5%		Unchanged

Q4 FY2023:
1.0%

Q1 FY2024:
1.0%

All 3 banks’ non-performing loans ratio remained unchanged from the previous quarter.

Comparing the 3 banks’ non-performing loans ratio, OCBC edged out DBS for having the lowest ratio, at just 1.0%.

Which of the 3 Singapore-Listed Banks Registered the Strongest Improvement in its Q1 FY2024 Results?

It is no surprise that DBS emerged on top with the strongest percentage improvement in its net interest income, net fee and commission income, and net profit. The bank also recorded the highest growth in its return on equity, along with its ratio being the highest (at 19.4%) among the 3 banks.

OCBC comes in second place for having the strongest growth (in percentage terms) in its other non-interest income, and at the same time, for having the highest net interest margin (at 2.27%), and the lowest non-performing loans ratio (at 1.0%).

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

The following table is a comparison of the 3 banks’ valuations based on their traded price at market close last Friday, 10 May 2024:

DBS
(SGX: D05)		UOB
(SGX: U11)		OCBC
(SGX: O39)
Share Price:S$35.40S$30.34S$14.12
P/E Ratio:8.789.118.97
P/B Ratio:1.581.101.16
Dividend Yield^^:5.42%5.60%5.81%
^^ Dividend yields for the 3 banks are computed based on their dividend payouts for FY2023 – for DBS, it is at $1.92/share, for UOB, it is at $1.70/share, and for OCBC, it is at $0.82/share.

Once again, OCBC is the ‘cheapest’ with its P/B ratio being the lowest, and at the same time, its dividend yield being the highest among the 3 banks.

At the other end of the spectrum, DBS is the ‘most expensive’ with its P/B ratio being the highest, and at the same time, its dividend yield being the lowest – the direct opposite of OCBC.

Closing Thoughts

It was another quarter of resounding performance from DBS – where the bank once again hit new highs in a number of categories, including its net fee and commission income breaking above S$1.0 billion mark for the first time, its net profit setting a new record at S$2,951m, along with its return on equity reaching a new high of 19.4%.

Hence, it comes as little surprise to me that DBS emerged the winner this time round in terms of improvements in its financial performance and key financial ratios recorded for Q1 FY2024.

As to which of the 3 Singapore-listed banks is the ‘cheapest’, as well as the ‘most expensive’ in terms of their valuations based on their traded price at market close last Friday (10 May), OCBC remains the ‘cheapest’, while DBS is the ‘most expensive’.

With that, I have come to the end of my comparison post on the 3 banks’ business updates for the 1st quarter of FY2024 ended 31 March. However, do take note that the contents above does not represent any buy or sell calls for any of the 3 banks’ shares. You are strongly encouraged to do your own due diligence before you make any investment decisions.

Disclaimer: At the time of writing, I am a shareholder of all 3 Singapore-listed banks.

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