NIM moderated but still strong in Q4 22: UOBKayHian

Some banks posted 49% year-on-year growth

Double-digit net interest margin (NIM) expansion subdued but is still strong with 15 basis points in DBS and 49% year-on-year growth in net interest income for DBS and OCBC in the fourth quarter of 2022, UOB Kay Hian said.

In a report, it said the anaemic loan growth will be traced back from Chinese firms switching from borrowing US dollar offshore, such as trade finance facilities to borrowing renminbi onshore.

The net profit of DBS is projected at $2.151b and OCBC at $1.51b, UOBKayHian.

“The banks are recommended for 2023 dividend yield of 4.7%. DBS's 4Q22 results will be announced on Feb 13, UOB on Feb 23 and OCBC on Feb 24,” it said.

UOBKayHian assigned a target price of  $45.35 for DBS and $17.75 for OCBC.