The three local banks of the Singapore Stock Exchange, dbs group holdings (SGX: D05), Overseas-Chinese Banking Corporation (SGX:O39), and United Overseas Bank (SGX:U11) has long been a major holding for Singapore investors. Owning these banks gives investors exposure to Singapore and the surrounding regional Asian economies. All three are earning well and rewarding shareholders handsomely. dividend. Given the strong rally in their stock prices in recent years, do they still offer a value buy at these prices? Let’s find out.
Why have Singapore’s banks performed strongly?
Singapore banks have been the major beneficiaries of higher interest rates (in recent years), which have increased their net interest margins (NIM). NIM refers to the interest rate spread between what banks charge borrowers and what they pay on deposits. NIM is the main metric that determines how much net interest income (NII) a bank earns. The higher NII achieved in recent years has also strengthened the capital position of banks…
