Maybank reveals top Singapore bank picks for investors

Go with DBS and UOB.

Maybank Kim Eng gained more optimism on the Singapore banks, particularly advising investors to stick to DBS and UOB stocks.

The research firm has raised its investment rating for the sector to Overweight, and chose DBS and UOB as its preferred picks.

However, Maybank cautioned that a new re-rating wave could come as early as mid-2014 as short-term interest rates start to rise.

"The earnings upswing can be powerful after several years of depression in net interest margin," it said.

It also foresees asset quality to stay resilient supported by strong household and corporate balance sheets.

"The majority of the loan growth since 2010 came from the traditionally safer housing loans and short-term US dollar trade loans. The healthy system liquidity profile should continue to support loan growth," said Maybank. 

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