JPM Singapore Banks

This document is being provided for the exclusive use of DANIEL OEIJ at ABACUS CAPITAL
Asia Pacific Equity Research

20 August 2015
Singapore Banks
In holding pattern till asset quality cracks
Sector earnings are up 11% y/y in 1H15, yet the stocks are down 12% Singapore
YTD (vs. 9% for STI) on worries linked to China trade finance, Singapore Banks
and Asean credit quality and weaker growth. We have cut our numbers by Harsh Wardhan Modi
AC
1%/6% for 2015E/16E to reflect these challenges. The NIM drivers are (65) 6882- 2450
broadly known (SoR/Sibor), but investment view is being shaped by NPL harsh.w.modi@jpmorgan.com
concerns. As of now, there is no shift in guidance beyond worries on J.P. Morgan Securities Singapore Private
Malaysia loans. Hence, we see the sector being range bound till asset Limited
quality comes to the fore. We stay with the view that UOB remains the Josh Klaczek
stock to trim on every rally, and is most vulnerable despite the YTD (852) 2800-8534
josh.klaczek@jpmorgan.com
correction.
J.P. Morgan Securities (Asia Pacific) Limited
 China trade finance: This is more of a volume, rather than asset

quality, issue. We expect a sharp decline in “general commerce/trade”
loans starting 3Q15, as the US$ loans get repaid. The funding currency
Banks P/E P/B RoE
will likely shift to CNY/CNH, where Singapore banks do not have a
(FY 15E) (x) (x) (%)
similar advantage. We expect 0.9% loan growth this year, with risks on
the downside. In terms of magnitude, 52% of DBS trade finance loans DBS 10.5 1.20 11.6
are to China, while 60% of total trade loans for the bank are US$ UOB 10.4 1.11 10.9
denominated. OCBC 10.0 1.21 12.3
Source: J.P. Morgan estimates.
 NIMs: The 3M SoR/Sibor has moved up 34/12bps in the last four weeks.
This bodes well for NIM (sensitivity on pg 7), with DBS best positioned
given 91% S$ CASA and 81% S$ LDR. UOB with about 55% S$
CASA and 94% S$ LDR will have the least advantage in this regard.
We expect DBS NIMs to move up 7bps by year-end, while UOB should
remain largely flat. The upcoming Singapore savings bonds (starts next
month) will absorb S$2-4bn, 1.5% of system time deposits.
 Asset quality: The NPL ratios have held up well (0.94%, up 3bps q/q,
2bps y/y) for the sector. The key risks include second order impact from
higher debt servicing and weaker currency and commodity prices on
cash flows, both in Singapore and elsewhere. We remain relatively less
concerned about DBS and OCBC underwriting standards versus UOB.
 Sources of NPL formation include loans linked to Singapore
investment property (lower rental, inverse demand/supply and higher
rates), SME property developers (lower volumes), companies related to
oil services (lower oil prices), commodity complex (lower price and
volumes impacting upstream to downstream) and businesses with a
significant import component (currency moves).
Equity Ratings and Price Targets
Mkt Cap Rating Price Target
Company Ticker (US$ mn) Price (S$) Cur Prev Cur Prev
DBS Group Holdings DBS SP 33,363.73 18.71 OW n/c 21.00 22.00
United Overseas Bank (UOB) UOB SP 22,609.39 19.82 UW n/c 19.00 22.50
OCBC Bank OCBC SP 27,254.89 9.45 OW n/c 10.50 12.00
Source: Company data, Bloomberg, J.P. Morgan estimates. n/c = no change. All prices as of 19 Aug 15.
See page 75 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision.
www.jpmorganmarkets.com
Harsh Wardhan Modi Asia Pacific Equity Research

(65) 6882- 2450 20 August 2015
harsh.w.modi@jpmorgan.com
Table of Contents
Investment Summary ...............................................................3
Declining Trade Loans ............................................................................................4
Rising Margins........................................................................................................6
Asset Quality ..........................................................................................................9
Stable NPLs ..........................................................................................................11
Investment Thesis, Valuation and Risks ..............................13
Share Price Performance .......................................................16
Industry DuPont Analysis ......................................................17
Assets......................................................................................19
Loans.......................................................................................22
Money Supply .........................................................................29
Deposit Growth.......................................................................30
Loan-to-Deposit Ratio ............................................................32
ACU Metrics – By Region ......................................................34
Asset Quality ..........................................................................35
Household Balance Sheet .....................................................37
Macro Indicators.....................................................................39
DBS Group Holdings..............................................................42
United Overseas Bank (UOB) ................................................52
OCBC Bank .............................................................................62
Table 1: Singapore banks valuation table

Price Rating PT P/B P/E JPMe EPS JPME vs. Con. ROE
S$ S$ 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016
DBS 18.71 OW 21.0 1.20 1.13 10.5 10.1 1.77 1.85 1.2% -4.2% 11.6% 11.4%
UOB 19.82 UW 19.0 1.11 1.07 10.4 10.9 1.91 1.81 -3.7% -15.5% 10.9% 9.9%
OCBC 9.45 OW 10.5 1.21 1.16 10.0 9.8 0.94 0.96 -1.2% -5.9% 12.3% 12.0%
Average 1.17 1.12 10.3 10.3 -1.2% -8.5% 11.6% 11.1%
Source: J.P. Morgan estimates, Bloomberg. Prices as of 19 August, 2015.
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Investment Summary
Sector earnings are up 11% y/y in 1H15, yet the stocks are down 12% YTD (vs. 9%
for STI) on worries linked to China trade finance, Singapore and Asean credit
quality, and weaker growth. We have cut our numbers by 1%/6% for 2015E/16E to
reflect these challenges. The NIM drivers are broadly known (SoR/Sibor), but
investment view is being shaped by NPL concerns. As of now, there is no shift in
guidance beyond worries on Malaysia loans. Hence, we see the sector being range
bound till asset quality comes to the fore. We stay with the view that UOB remains
the stock to trim on every rally, and is most vulnerable despite the YTD correction.
Figure 1: General Commerce Loan Growth

General commerce loan growth
averaged -2% YTD
Source: MAS.
Figure 2: System NPL Ratio (%)

System NPL ratio is stable at
0.90%
Source: MAS.
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Declining Trade Loans

This is more of a volume, rather than asset quality, issue. We expect a sharp decline
in “general commerce/trade” loans starting 3Q15, as the US$ loans get repaid. The
funding currency will likely shift to CNY/CNH, where Singapore banks do not have
a similar advantage. We expect 0.9% loan growth this year, with risks on the
downside. In terms of magnitude, 52% of DBS trade finance loans are to China,
while 60% of total trade loans are US$ denominated.
Figure 3: System Loan Growth

System loan growth slowed to
3.4% y/y from 11% in Dec-14
Source: MAS.
Figure 4: DBS: General Commerce Loan Growth Trend

DBS general commerce loans
increased 2% q/q in 2Q15,
mainly due to a 7% q/q decline in
1Q15
Source: Company Reports and J.P. Morgan estimates.
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Figure 5: UOB: General Commerce Loan Growth Trend

UOB general commerce loan
growth remained flat in 2Q15 on
a q/q basis
Figure 6: OCBC: General Commerce Loan Growth Trend

OCBC general commerce loan
growth was flat in 2Q15 on a q/q
basis
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Rising Margins
The 3M SoR / Sibor has moved up 34/12bps in the last four weeks. This bodes well
for NIM, with DBS best positioned given 91% S$ CASA and 81% S$ LDR. UOB
with about 55% S$ CASA and 94% S$ LDR will have the least advantage in this
regard. We expect DBS NIMs to move up 7bps by year-end, while UOB should
remain largely flat. The upcoming Singapore savings bonds (starts next month) will
absorb S$2-4bn, 1.5% of system time deposits.
Figure 7: 3M Swap Offer Rate (SORF3M Index) in last one year

3M SOR up 34 bps in the past
four weeks
Source: Bloomberg.
Figure 8: 3M Singapore Inter-Bank Rate (SIBF3M Index) in last one year

3M Sibor up 12 bps in the past
four weeks
Source: Bloomberg.
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Figure 9: S$ LDR by Banks
With low S$ CASA and high S$

LDR, UOB has least advantage
to SoR/Sibor movements
Source: Company Reports.
Figure 10: Impact of 100 bps rise in Sibor on NIM

DBS is likely to benefit the most
from SoR/Sibor movements
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Table 2: Impact of 100 bps rise in Sibor on NIM

DBS OCBC UOB
Total loans 283,723 210,146 202,406
S$ loans 112,903 76,346 107,614
% S$ loans 40% 36% 53%
% linked to variable rates 80% 80% 80%

Sibor 50% 25% 50%
SOR 50% 25% 50%
CoF 0% 25% 0%
Board rates 0% 25% 0%
Loan book linked to Sibor 45,161 15,269 43,046

Loan book linked to SOR 45,161 15,269 43,046
Loan book linked to CoF - 15,269 -
Loan book linked to board rates - 15,269 -
Total deposits 305,913 246,424 241,485

S$ deposits 139,544 86,325 114,691
% S$ deposits 46% 35% 47%
Total CASA deposits 184,502 113,402 100,735

Total CASA ratio 60.3% 46.0% 41.7%
S$ CASA deposits 127,086 69,060 63,080

S$ FD 12,458 17,265 51,611
S$ CASA ratio 91.1% 80.0% 55.0%
LDR 92.7% 85.3% 83.8%

S$LDR 80.9% 88.4% 93.8%
Incremental Interest income

Sibor 280 95 267
SOR 325 110 310
CoF - 37 -
Board rates - 107 -
Total 605 348 577
Incremental Interest expense

S$ CASA 191 104 95
Rise in rates 0.15% 0.15% 0.15%
S$ FD 75 104 413
Rise in rates 0.60% 0.60% 0.80%
Total 265 207 508
Increase in NII 340 141 69

NII in Jun-15 LTM 6,709 5,054 4,738
% 5.1% 2.8% 1.5%
NIM LTM 1.64% 1.58% 1.60%

Avg IEA in past 4Q 408,410 319,970 295,695
New NII 7,049 5,195 4,807

New NIM 1.73% 1.62% 1.63%
Increase in NIM bps 8 4 2
Source: Company reports and J.P. Morgan estimates.
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Asset Quality
The NPL ratios have held up well (0.94%, up 3bps q/q, 2bps y/y) for the sector. The
key risks include second order impact from higher debt servicing and weaker
currency and commodity prices on cash flows, both in Singapore and elsewhere. We
remain relatively less worried with DBS and OCBC underwriting standards versus
UOB.
Figure 11: Singapore: 3M Sibor and debt servicing costs

% p.a. and % of GDP
We expect debt servicing as a

percentage of GDP to reach peak
levels
Source: MAS.
Figure 12: System Special Mention Loans (%)

System special mention loans
declined to 2.16%
Source: MAS.
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Figure 13: NPL Ratios by Bank
NPL ratio is stable across the

board
Source: Company reports.
Figure 14: NPL Coverage by Bank

NPL Coverage low at UOB and
DBS vs. OCBC
Figure 15: Excess Provisions (% Loans)
Average excess provisions for

the sector stand at 0.46%
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Stable NPLs
Sources of NPL formation include loans linked to Singapore investment property
(lower rental, inverse demand/supply and higher rates), SME property developers
(lower volumes), companies related to oil services (lower oil prices), commodity
complex (lower price and volumes impacting upstream to downstream) and
businesses with significant import component (currency moves).
Figure 16: Sector Wise NPL Trend
Figure 17: Singapore: Property Price Index
Source: CEIC.
Figure 18: Brent Crude Prices (USD)
Source: Bloomberg.
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Figure 19: Crude Palm Oil Prices (USD)
Source: Bloomberg.
Figure 20: CRB Commodity Index (USD)
Source: Bloomberg.
Figure 21: Bloomberg-JP Morgan Asia Dollar Index
Source: Bloomberg.
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Investment Thesis, Valuation and Risks
DBS Group Holdings (Overweight; Price Target: S$21.00)

Investment Thesis
We maintain an OW rating on the stock as it is the key beneficiary of a rate hike.
Key catalysts/reasons:
 4Q fed rate hike now appears to be a matter of time. As a result, Sibor/SoR
are again running up after a lull earlier in the year. From bank’s earnings
point of view, the key discussion will move to pace of rate hikes, rather than
the lift-off date. We are monitoring fed fund futures (WIRP <GO>) for
sharp changes in probability in 2016, which will impact the NIM outlook
for DBS.
 DBS signed a bancassurance deal with Manulife in April, worth S$1.6bn for
15 years. Similar deals at other banks (UOB with Prudential and CIMB with
Sun Life) suggest that the revenue pick-up would also come from ongoing
variable payments, and higher bancassurance sales, which would add almost
~3-5% to recurring earnings. We expect more details in the next six months,
which should lead to positive revisions. More importantly, these earnings
command higher multiples as they do not consume capital and have higher
recurring component to it.
 DBS, arguably, is leading the digital banking initiatives in the region. The
bank has consistently started guiding for a more organic growth in markets
like India and Indonesia on the back of its digital capabilities. Given the
bank’s track record, questions around DBS’ ability to ramp up operations in
these large markets without a large acquisition will persist. But the fact that
probability of such a move exists, provides a good risk-return trade-off at
current levels we think.
Valuation
Our Jun-16 PT (previously Dec-15) of S$21 is based upon a 2-stage DDM. We use a
fair P/BV multiple of 1.21x with a normalized RoE of 11.1%, risk-free rate of 3.0%,
cost of capital of 9.25%, and growth rate of 0.5%. Our PT is reduced as a result of a
slightly lower P/BV multiple.
Risks to Rating and Price Target

Key downside risks to our view include lack of cost discipline, higher-than-expected
credit costs, faster than expected unwind of China trade finance book and inorganic
growth.
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(65) 6882- 2450 20 August 2015
United Overseas Bank (UOB) (Underweight; Price Target: S$19.00)

Investment Thesis
We maintain our structural UW on UOB. Key points:
 Higher rates would have a very different impact on UOB’s earnings vs. the
2005-06 rate cycle. In the current cycle, a 100bps move in rate would lead
to NII increase of S$300-400mn (as per the bank), and S$180mn pick-up in
credit costs as debt servicing burden for borrowers will move up (as per
JPMe). Hence, the net gains from even a 100bp rate hike would be rather
limited. This is very different from the situation in 2005-06, when the bank's
earnings increased by 50% y/y in FY06 for a 194bp move-up in SIBOR.
 We worry about the bank’s real estate exposure, specially the investment
property loans (about 30% of Singapore mortgages) and small- and
medium-sized developers (about 30-40%) of total developer book in
Singapore. The bank has delivered 14% growth in mortgages in the last five
years and 17% growth in building and construction loans, which poses risks
of NPL formation. Following the large NPL formation in 2Q last year, we
have become wary of credit underwriting standards for real estate loans at
the bank.
 After 1H15 NIM pick-up, we do not see any more avenues of margin
expansion at the bank as 94% SG$ LDR (84% group LDR) and mid-50’s
SG$ CASA (42% group CASA) limit the bank’s ability to manage funding
costs at a point in time when system liquidity is running very tight. Our
2015/16 estimates are 4%/15% below the Street and we see limited drivers
for the stock in the near term.
 While the recent correction provides a degree of value to the stock but we
do not see any catalyst for the stock to move higher. Accordingly, UOB
stays a relative UW in the sector.
Valuation
Our Jun-16 PT (previously Dec-15) of S$19 is based upon a 2-stage DDM. We use a
fair P/BV multiple of 0.98x with a normalized RoE of 9.6%, risk-free rate of 3.5%,
cost of capital of 9.75%, and growth rate of 2.0%. Our PT is reduced as a result of a
lower P/BV multiple and ROE.

Key upside risks to our view include meaningful easing in deposit
competition, elevated trading gains, and better asset quality.
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OCBC Bank (Overweight; Price Target: S$10.50)

Investment Thesis
We believe OCBC is now best positioned among Singapore banks to pursue organic
growth after the Wing Hang deal and rights.
 We expect the bank to reach an 11.5%-12% CET1 over the next 2-4
quarters, addressing a key investor concern.
 There are three drivers of capital accumulation for the bank – move to IRB
at Bank of Singapore, IRB at OCBC Wing Hang and DRP (ongoing).
 As the fully phased in CET1 (11.2% in 2Q) accumulates quarter on quarter,
we expect the worries to dissipate slowly but steadily, leading to gradual re-
rating.
 On earnings, a pick-up in HK treasury sales and higher revenues at BoS /
brokerage given recent equity volumes in Asia poses upside risks.
 The NIM benefit at OCBC from higher rates also appears to be under-
appreciated as the bank’s CASA (46%) base was built up during low rate
environment (2006-12), and as soon as 2H15, we expect NIM pick-up
(+6bps h/h) starting to show up.
 The stock has weakened recently (-9% YTD) on weak 2Q and perceived
lack of near-term drivers, which allows medium-term investors to build
position in a high-quality franchise at undemanding valuations we believe.
Valuation
Our Jun-16 PT (previously Dec-15) of S$10.5 is based upon a 2-stage DDM. We use
a fair P/BV multiple of 1.22x with a normalized RoE of 11.5%, risk-free rate of
3.5%, cost of capital of 9.75%, and growth rate of 2.0%. Our PT is reduced as a
result of a lower P/BV and ROE.

Key downside risks include asset quality deterioration (Singapore property, Macau
and Indonesia), faster-than-expected unwind of the China trade book, lack of NIM
expansion despite Sibor/SoR moves in last six months and slower-than-expected
capital accumulation.
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(65) 6882- 2450 20 August 2015
Share Price Performance

Figure 22: One-week price performance Figure 23: One-month price performance
% %
Source: Bloomberg. Prices as of 19th August, 2015 Source: Bloomberg. Prices as of 19th August, 2015
Figure 24: Three months price performance Figure 25: Six months price performance
% %
Figure 26: 12 months price performance Figure 27: YTD price performance
% %
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(65) 6882- 2450 20 August 2015
Industry DuPont Analysis

The shifts in sector returns are driven primarily by increase in margins.
Table 3: Singapore Du Pont (%)
We expect margins to improve Du Pont Item 2011 2012 2013 2014 2015E 2016E 2017E
on account of SoR/Sibor NIM 1.85 1.78 1.66 1.69 1.73 1.81 1.93
movements
IEA/Assets 81.57 82.97 85.15 85.23 84.73 84.59 84.67
NII/Assets 1.51 1.48 1.41 1.44 1.47 1.53 1.63
Non II/Assets 0.88 0.95 0.91 0.86 0.89 0.92 0.94
Rev/Assets 8.87 9.46 8.72 8.74 9.26 9.53 10.00
Costs/Assets 1.03 1.03 1.00 0.99 1.04 1.07 1.09
Costs/income 43.26 42.56 43.01 42.98 44.01 43.65 42.22
Opt Profits/Assets 1.36 1.40 1.32 1.31 1.32 1.38 1.49
Credit Cost 0.30 0.23 0.24 0.24 0.25 0.36 0.50
ROA 0.94 1.18 0.97 1.01 0.97 0.95 0.97
A/E 11.81 11.97 12.21 12.43 12.00 11.71 11.59
ROE 11.12 14.28 11.71 12.61 11.57 11.09 11.25
Table 4: NIM (%)

NIMs to drive shifts in sector 2011 2012 2013 2014 2015E 2016E 2017E
returns
DBS 1.77 1.70 1.62 1.68 1.77 1.88 2.00
UOB 1.92 1.87 1.72 1.71 1.76 1.81 1.90
OCBC 1.86 1.77 1.64 1.68 1.66 1.73 1.88
Sector 1.85 1.78 1.66 1.69 1.73 1.81 1.93
Table 5: Non-II/Total Assets (%)
2011 2012 2013 2014 2015E 2016E 2017E

DBS 0.88 0.80 0.89 0.78 0.85 0.90 0.94
UOB 0.90 1.05 0.97 0.95 0.96 0.96 0.99
OCBC 0.87 1.01 0.86 0.86 0.87 0.89 0.91
Sector 0.88 0.95 0.91 0.86 0.89 0.92 0.94
Table 6: Revenue/Total Assets (%)

Revenue to total assets will 2011 2012 2013 2014 2015E 2016E 2017E
improve going forward, driven
DBS 8.90 9.14 8.88 8.73 9.55 9.98 10.51
primarily by margins
UOB 9.62 10.27 9.46 9.59 9.81 10.01 10.42
OCBC 8.10 8.98 7.83 7.89 8.42 8.60 9.05
Sector 8.87 9.46 8.72 8.74 9.26 9.53 10.00
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Table 7: Costs to Assets (%)
2011 2012 2013 2014 2015E 2016E 2017E

DBS 1.06 1.04 1.04 1.03 1.09 1.14 1.15
Cost management is better at UOB 1.09 1.12 1.08 1.06 1.11 1.13 1.14
OCBC vs. its peers OCBC 0.96 0.94 0.88 0.88 0.92 0.94 0.97
Sector 1.03 1.03 1.00 0.99 1.04 1.07 1.09
Table 8: Operating Profit/Total Assets (%)
2011 2012 2013 2014 2015E 2016E 2017E

DBS 1.37 1.28 1.33 1.26 1.33 1.44 1.56
UOB 1.44 1.53 1.42 1.43 1.41 1.44 1.53
OCBC 1.26 1.38 1.21 1.26 1.22 1.26 1.37
Sector 1.36 1.40 1.32 1.31 1.32 1.38 1.49
Table 9: Credit costs (%)

Historically, OCBC has the 2011 2012 2013 2014 2015E 2016E 2017E
lowest credit costs compared to
DBS 0.38 0.20 0.32 0.24 0.26 0.35 0.45
its peers
UOB 0.36 0.30 0.24 0.30 0.34 0.53 0.72
OCBC 0.17 0.19 0.17 0.19 0.15 0.21 0.31
Sector 0.30 0.23 0.24 0.24 0.25 0.36 0.50
Table 10: RoA (%)

We expect RoA to increase for 2011 2012 2013 2014 2015E 2016E 2017E
DBS and OCBC, but UOB’s RoA
is expected to decline DBS 0.97 1.10 0.97 0.96 0.99 1.01 1.06
UOB 0.99 1.10 1.08 1.06 0.98 0.90 0.88
OCBC 0.88 1.35 0.85 1.02 0.93 0.93 0.97
Sector 0.94 1.18 0.97 1.01 0.97 0.95 0.97
Table 11: Asset/Equity
2011 2012 2013 2014 2015E 2016E 2017E

DBS 11.38 11.54 11.62 11.98 11.66 11.32 11.19
UOB 11.23 11.20 11.39 11.45 11.12 11.01 10.98
OCBC 12.81 13.16 13.61 13.85 13.21 12.81 12.62
Sector 11.81 11.97 12.21 12.43 12.00 11.71 11.59
Table 12: RoE (%)

We expect RoE gap to narrow 2011 2012 2013 2014 2015E 2016E 2017E
down this year
DBS 11.06 12.67 11.30 11.50 11.55 11.38 11.82
UOB 11.07 12.34 12.32 12.15 10.91 9.93 9.64
OCBC 11.23 17.82 11.52 14.17 12.26 11.96 12.29
Sector 11.12 14.28 11.71 12.61 11.57 11.09 11.25
Source: Company reports and J.P. Morgan estimates
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Assets
System Level
Figure 28: System Asset Growth
System asset growth slowed to
4% y/y from 7% y/y a year ago
and 3m ann. growth fell sharply

to -9% from 9% in Mar-15
Source: MAS.
Figure 29: System Assets (S$ bn)

(Breakdown as External and Domestic Assets)
External assets constitute 56%

of system assets
External assets are growing at

3% y/y, while domestic assets
are growing at 4% y/y
Source: MAS
Figure 30: System Assets (S$ bn)

(Breakdown by Foreign and Local Banks)
Foreign banks’ assets now
constitute 65% of system
assets vs. 75% a decade ago
Local banks’ asset

growth has slowed to 6%
y/y, while foreign banks’ asset
growth slowed to 3% y/y
Source: MAS.
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Figure 31: DBU’s Assets (S$ bn)

DBU asset growth slowed to
4% y/y, to S$1.051 trillion
Source: MAS.
Figure 32: DBU Asset Composition

Loans to customers constitute
58% of total assets
This is followed by
securities (~18%) and
interbank placements (16%)
Source: MAS.
Figure 33: ACU Assets (US$ bn)

ACU assets stand at
US$1.17trillion, down 4% y/y
Source: MAS.
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Bank Level
Figure 34: DBS
DBS has total asset base of
S$436bn, with non-SG assets
constituting 34% of the total
assets
Source: Company reports. Assets exclude intangible assets
Figure 35: UOB

UOB has total asset base of
assets
Figure 36: OCBC

OCBC has total asset base of
assets
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Loans
System Level
Figure 37: System Loan Growth
System asset growth slowed to
4% y/y from 7% y/y a year ago
and 3m ann. growth fell sharply

to -9% from 9% in Mar-15
Source: MAS.
Figure 38: DBU Loan Growth

(Breakdown as Business and Consumer Loans in S$ bn)
Business loans, constitute
60.7% of total DBU loan, grew
0.2% y/y
Consumer loans grew

by 3.6% y/y
Source: MAS.
Figure 39: ACU Loan Growth

(Breakdown as Business and Consumer Loans in S$ bn)
Business loans, constitute

89% of total ACU loans,
grew at 5.1% y/y
Consumer loans grew at

9.8% y/y
Source: MAS.
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By Segment – Business
Figure 40: Total Business Loans

Business loans are S$861bn
Business loan growth slowed

to 3.0% y/y from 9.7% in Dec-
14
and 3m ann. growth fell to -4.1%
Source: MAS
Figure 41: Business loans growth breakdown (i)
Losing Momentum
General Commerce (20% of

BL)
Financial Institutions (22% of

BL)
Others (13% of BL)
Source: MAS.
Figure 42: Business loans growth breakdown (ii)
Losing Momentum
Manufacturing (10% of BL)
Construction (16% of BL)
Transport, storage and

communication (9% of BL)
Source: MAS.
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By Segment – Consumer
Figure 43: Total Consumer Loans

Consumer loans are S$301bn
Consumer loan growth slowed

to 4.8% y/y from 8.1%
in Dec-14...
…and 3m ann. growth fell to -

1.3% from 5.8% in March
Source: MAS.
Figure 44: Housing Loans y/y growth

Housing loans now stand at
S$183.1bn while housing loan
growth has been steadily
declining
Source: MAS.
Figure 45: Consumer loans growth breakdown

Car loans have witnessed a
steep decline and fell 15%
y/y…
…Credit card loan growth

slowed down and fell -1% y/y
Source: MAS.
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Loan Limit Utilization
Figure 46: Overall limit utilization (%)

55% of limits granted were
utilized
Source: MAS.
Figure 47: Business loans limit utilization (%)

Business loans limit utilization
 Total : 54%
 Building: 76%
 Transport: 72%
 Agriculture: 67%
 Business Services: 64%
 Manufacturing: 59%
 FI: 51%
 Others: 44%
 GC: 36%
Source: MAS.
Figure 48: Consumer loans limit utilization (%)

Consumer loans limit
Utilization
 Total: 59%
 Housing: 88%
 Prof & Private: 39%
Source: MAS.
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Figure 49: DBU’s bill financing (S$ bn)

DBUs’ trade assets have
increased at 32% CAGR for
two years peaking in May-14
but down 27% since then
Source: MAS.
Figure 50: Statutory liquidity position of DBUs (%)

Liquidity ratio is currently at
23.8%
Source: MAS.
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Bank Level
Breakdown by Currency
Figure 51: DBS (S$ bn)

Loans at DBS grew 9% y/y…
…broad based growth across

SGD and FX loans, up by 8%
y/y and 9% y/y, respectively
Figure 52: UOB (S$ bn)

Loans at UOB grew 8% y/y…
…driven by FX loan growth of

15% y/y, specifically USD
loans (11% y/y)…
…while SGD loans grew by

2% y/y
Figure 53: OCBC (S$ bn)

Loans at OCBC grew 18%
y/y…
…driven by FX loan growth of

30% y/y, due to Wing Hang
Bank acquisition…
…while SGD loans grew by

just 2% y/y
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Breakdown by Geography
Figure 54: DBS
Declining exposure to
Singapore (46%)
China’s exposure has

remained stable at 17%
Figure 55: UOB

Increasing exposure to China
(12%)
SG exposure has been

gradually declining to 57%
Figure 56: OCBC

China’s exposure has
increased to 27% from 15% a
year ago due to WHB
acquisition…
…..Singapore exposure has

declined to 41% from 48%
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Money Supply
Figure 57: System level money supply
Money supply growth picked
up post a slow down in
1H14…
…with M1 growing by 9.9% y/y
…and M3 growing by 6.6% y/y
Source: MAS.
Figure 58: DBU’s money supply
DBU’s money supply had

been declining steeply since
mid 2013…
…with M1 growing at 2.4% y/y,

and M3 growing at 3.6% y/y
Source: MAS.
Figure 59: ACU’s money supply
ACU’s money supply growth

has slowed sharply…
…with M1 growing at 23% y/y
…and M3 growing at 14% y/y
Source: MAS.
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Deposit Growth
DBU Level
Figure 60: DBU’s Deposit Growth

Deposits up 3% y/y to S$548.8bn
…3m ann. rate is -7%
Source: MAS.
Figure 61: DBU’s deposit composition

CASA ratio improved 90bps
last month, to 62.0%
Source: MAS.
Figure 62: DBU’s deposit growth y/y

CA grew 1% y/y
SA deposits grew 2% y/y
TD grew 4% y/y
Source: MAS.
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Bank level - breakdown by Currency
Figure 63: DBS (S$ bn)

Deposits grew 2% y/y
SGD denominated deposits

grew 3% y/y
FX deposits grew 2% y/y, with

HKD deposits growing by 21%
y/y
Figure 64: UOB (S$ bn)


grew 9% y/y
FX deposits grew 15% y/y, led

by USD deposits (42% y/y)
Figure 65: OCBC (S$ bn)


declined 6% y/y
FX deposits grew 46% y/y, led

by USD deposits (49% y/y)
and HK$ deposits
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Loan-to-Deposit Ratio
System Level
Figure 66: Forex LDR

FX LDR is down 610bps y/y, to
143%
Source: MAS.
Figure 67: DBU’s S$ LDR

DBU’s S$ LDR is at 111%
Source: MAS.
Figure 68: ACU’s LDR by regions (in US$)

East Asia LDR had been
steadily inching up due to
increasing offshore financing
by SG banks but stabilized
since mid-2014
Source: MAS.
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Bank level – LDR by Currency
Figure 69: DBS

At DBS, SGD LDR has
increased from 77% to 81% in
last one year…
…and FX LDR has increased

from 96% to 103% in last one
year
Figure 70: UOB

At UOB, SGD LDR has
decreased from 100% to 94% in
last one year…
…and FX LDR has remained

steady at 75% in last one year
Figure 71: OCBC

At OCBC, SGD LDR has
increased from 82% to 88%...
…FX LDR decreased from

94% to 84% in the last year
33

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ACU Metrics – By Region
Figure 72: Non-bank Loans (US$ bn) Figure 73: Non-bank Deposits
Source: MAS. Source: MAS.
Figure 74: Interbank Loans Figure 75: Interbank Deposits
Source: MAS. Source: MAS.
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Asset Quality
System Level
Figure 76: NPL (%)
Asset quality improved as NPL
ratio decreased to 0.90% from
0.92% last qtr
Source: MAS.
Figure 77: Special mention loans (%)

Special mention loans also
dropped 12bps q/q, to 2.16%
Source: MAS.
Figure 78: NPL net of specific provisions (%)

NPL net of specific provisions
fell 2bps q/q, to 0.72%
Source: MAS.
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Bankruptcy and Credit Card statistics
Figure 79: Bankruptcy Applications and Orders

2,589 Petitions filed for
bankruptcy in the past
one year
1,757 orders were passed

for bankruptcy in the past
one year
Source: IPTO and CEIC.
Figure 80: Bankruptcy Applications and Orders in last one year

Bankruptcy applications
and orders passed have
both peaked up
Highest applications were

made in the month of
Mar-14 (250)
Highest orders were

passed in Apr-14 (212)
Source: IPTO and CEIC.
Figure 81: Credit card charge-off rates (%)

Charge off rates were
 2Q15: 5.7%
 1Q15: 5.5%
 2014: 5.5%
 2013: 5.0%
 2012: 4.8%
 2011: 4.3%
Source: MAS.
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Household Balance Sheet

Singapore has a liquid household balance sheet. We believe that NPL formation will
likely be mild due to high debt-coverage ratios.
Figure 82: Household balance sheet (S$ bn)
Source: Singapore Department of Statistics.
Figure 83: Household Debt in S$ bn (LHS) and HH Debt-to-GDP ratio (RHS)
Source: CEIC and Singapore Department of Statistics.
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Figure 84: Household Net Wealth in S$ bn (LHS) and HH Wealth-to-GDP ratio (RHS)
Source: CEIC and Singapore Department of Statistics.
Figure 85: Composition of Debt (S$ bn)
Source: Singapore Department of Statistics.
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Macro Indicators
Figure 86: Real GDP growth Figure 87: FX reserves (in USD mn)
Source: Bloomberg. Source: Bloomberg.
Figure 88: USD - SGD Figure 89: Inflation (CPI y/y)
Source: J.P. Morgan estimates, Bloomberg Source: J.P. Morgan estimates, Bloomberg.
Figure 90: 2Yr bond yield Figure 91: 10Yr bond yield
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Figure 92: Prime Lending rate Figure 93: Mortgage rate
Figure 94: 3M SIBOR Figure 95: 12M SIBOR
Figure 96: Savings deposit rate Figure 97: Fixed deposit rates
Source: Bloomberg.
Source: Bloomberg.
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Figure 98: Share price vs. 52-week range
Source: Bloomberg. Prices as of 18th August, 2015.
Table 13: Earnings estimate revisions by the Street

FY15E FY16E
1m 3m 6m 12m YTD 1m 3m 6m 12m YTD
DBS 0% 1% 1% 1% 0% -1% 0% -1% -2% -4%
UOB -3% -3% -3% -2% -4% -4% -4% -5% -4% -6%
OCBC 0% 0% -1% 4% -2% 0% -1% -2% -1% -3%
Average -1% -1% -1% 1% -2% -2% -2% -3% -2% -4%
Source: Bloomberg.
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DBS Group Holdings
DBS Group Holdings Ltd (Reuters: DBSM.SI, Bloomberg: DBS SP)

Company Data S$ in mn, year-end Dec FY12A FY13A FY14A FY15E FY16E FY17E
52-week Range (S$) 21.50-17.63 Operating Profit (S$ mn) 4,450 5,009 5,288 5,927 6,707 7,795
Market Cap (S$ mn) 46,289 Net Profit (S$ mn) 3,809 3,672 4,046 4,422 4,689 5,265
Market Cap ($ mn) 32,976 Cash EPS (S$) 1.56 1.49 1.63 1.77 1.84 2.03
Shares O/S (mn) 2,474 Fully Diluted EPS (S$) 1.56 1.49 1.63 1.77 1.84 2.03
Fiscal Year End Dec DPS (S$) 0.56 0.58 0.58 0.60 0.62 0.64
Price (S$) 18.71 EPS growth (%) 24.7% (4.7%) 9.5% 8.7% 4.2% 10.3%
Date Of Price 19 Aug 15 ROE 12.7% 11.3% 11.5% 11.6% 11.4% 11.8%
3M - Avg daily val (S$ mn) 87.08 P/E (x) 12.0 12.6 11.5 10.6 10.2 9.2
3M - Avg daily val ($ mn) 62.0 BVPS (S$) 12.78 13.50 14.74 15.57 16.49 17.56
3M - Avg daily vol (mn) 4.29 P/BV (x) 1.46 1.39 1.27 1.20 1.13 1.07
FTSTI 3049.65 Dividend Yield 3.0% 3.1% 3.1% 3.2% 3.3% 3.4%
Exchange Rate 1.40 Source: Company data, Bloomberg, J.P. Morgan estimates.
Price Target End Date 30-Jun-16

DBS Group Holdings (Overweight; Price Target: S$21.00)
Investment Thesis
We maintain OW rating on the stock as it is the key beneficiary of rate hike. Key
catalysts/reasons:
 4Q Fed rate hike now appears a matter of time. As a result, Sibor/SoR are
again running up after a lull earlier in the year. From bank’s earnings point
of view, the key discussion will move to pace of rate hikes, rather than the
lift-off date. We are monitoring Fed Fund futures (WIRP <GO>) for sharp
changes in probability in 2016, which will impact the NIM outlook for
DBS.
 DBS signed a bancassurance deal with Manulife in April, worth S$1.6bn for
15 years. Similar deals at other banks (UOB with Prudential and CIMB with
Sun Life) suggest that the revenue pick-up would also come from ongoing
variable payments, and higher bancassurance sales, which would add almost
~3-5% to recurring earnings. We expect more details in next six months,
which should lead to positive revisions. More importantly, these earnings
command higher multiples as they do not consume capital and have higher
recurring component to it.
 DBS, arguably, is leading the digital banking initiatives in the region. The
bank has consistently started guiding for a more organic growth in markets
like India and Indonesia on the back of its digital capabilities. Given the
bank’s track record, questions around DBS’ ability to ramp up operations in
these large markets without a large acquisition will persist. But the fact that
probability of such a move exists, provides a good risk-return trade-off at
current levels we think.
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(65) 6882- 2450 20 August 2015
Valuation
Our Jun-16 PT of S$21 is based upon a 2-stage DDM. We use a fair P/BV multiple
of 1.21x with a normalized RoE of 11.1%, risk-free rate of 3.0%, cost of capital of
9.25%, and growth rate of 0.5%.

Key downside risks to our view include lack of cost discipline, higher-than-expected
credit costs, faster than expected unwind of China trade finance book and inorganic
growth.
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(65) 6882- 2450 20 August 2015
Key catalyst for the stock price: Upside risks to our view: Downside risks to our view:
• Margins holding up well • Higher-than-expected loan growth • Higher than expected asset quality
• Better S$ LDR and CASA than the sector • Higher-than-expected margins deterioration in China or otherw ise
• Greater beneficiary of rise in rates • Lack of cost discipline
Key financial metrics FY14 FY15E FY16E FY17E Valuation and price target basis
NII (LC) 6,321 7,022 7,795 8,857 Our Jun-16 price target is based upon 2-stage DDM. We use a
Total rev enue (LC) 9,618 10,798 12,003 13,546
fair P/B based multiple of 1.21x, w ith a normalised RoE of
Rev enue grow th (%) 7.7% 12.3% 11.2% 12.9%
Costs (LC) (4,330) (4,871) (5,296) (5,751) 11.1%.
PPOP (LC) 5,288 5,927 6,707 7,795
LLP (LC) (638) (742) (1,031) (1,419)
Net income (LC) 4,046 4,422 4,689 5,265
NIMs (%) 1.68% 1.77% 1.88% 2.00% Chart to support valuation and price target
Non-II/Rev enue (%) 34.3% 35.0% 35.1% 34.6% PB based Valuation
CIR (%) 45.02% 45.11% 44.12% 42.45%
Costs/Assets (%) 1.03% 1.09% 1.14% 1.15% Normalised RoE 11.1%
PPOP/Assets (%) 1.0% 1.0% 1.3% 1.7% Risk-free rate 3.00%
LLP/Loans (%) -0.2% -0.3% -0.4% -0.5% Cost of capital 9.25%
ROA (%) 0.96% 0.99% 1.01% 1.06% Long term grow th 0.50%
ROE (%) 11.5% 11.6% 11.4% 11.8% Fair PB 1.21x
Tier 1 capital (%) 13.1% 14.1% 14.4% 14.7%
NPL ratio (%) 0.90% 1.17% 1.58% 1.95% PV of Terminal Value S$18.2
NPL cov erage (%) 147% 115% 95% 90% PV of Div idends S$1.1
Key model assumptions FY14 FY15E FY16E FY17E PV of today 's Fair Value S$19.3
Loan grow th 10.7% 2.3% 6.2% 6.4% PB based Jun-16E Fair Value S$21.1
Deposit grow th 8.5% 0.1% 5.7% 6.9% So urce: Blo omberg, Company and J.P. M o rgan estimates.
NIMs (%) 1.68% 1.77% 1.88% 2.00%
So urce: Company and J.P . M o rgan estimates.
Sensitivity analysis PPOP EPS JPMe vs. consensus, change in estimates

Sensitiv ity to FY15E FY16E FY15E FY16E EPS FY15E FY16E
5% change on revenue grow th 8.1% 8.1% 9.2% 9.8% JPMe old 1.78 1.89
10bps change in NIM 6.7% 6.2% 7.6% 7.5% JPMe new 1.77 1.84
1% change in CIR 1.8% 1.8% 2.1% 2.2% % chg -1% -2%
10bps change in credit costs NA NA 5.4% 5.3% Consensus 1.75 1.93
So urce: J.P . M o rgan estimates. So urce: Blo omberg, J.P. M o rgan estimates.

S$ S$ 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016
DBS 18.71 OW 21.0 1.20 1.13 10.5 10.1 1.77 1.85 1.2% -4.2% 11.6% 11.4%
UOB 19.82 UW 19.0 1.11 1.07 10.4 10.9 1.91 1.81 -3.7% -15.5% 10.9% 9.9%
OCBC 9.45 OW 10.5 1.21 1.16 10.0 9.8 0.94 0.96 -1.2% -5.9% 12.3% 12.0%
Average 1.17 1.12 10.3 10.3 -1.2% -8.5% 11.6% 11.1%
44

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Table 15: DBS: Quarterly forecasts
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15E 4Q15E
Interest Income 1,920 1,975 2,006 2,085 2,129 2,218 2,266 2,335 2,380 2,396 2,451 2,560
Interest Expense (593) (593) (600) (631) (641) (661) (664) (661) (690) (653) (689) (733)
Net Interest Income 1,327 1,382 1,406 1,454 1,488 1,557 1,602 1,674 1,690 1,743 1,763 1,827
Non-Interest
Income 990 927 744 697 963 756 912 666 1,046 947 964 819
Net Fee income 507 477 462 439 510 503 555 459 560 582 594 535
Trading income 408 336 188 163 362 176 271 92 356 273 270 182
Other operating
income 75 114 94 95 91 77 86 115 130 92 100 102
Total Revenues 2,317 2,309 2,150 2,151 2,451 2,313 2,514 2,340 2,736 2,690 2,726 2,646
Costs (952) (987) (949) (1,030) (1,041) (1,054) (1,109) (1,126) (1,181) (1,218) (1,225) (1,247)
PPOP 1,365 1,322 1,201 1,121 1,410 1,259 1,405 1,214 1,555 1,472 1,502 1,399
Loan loss provisions (223) (245) (151) (137) (151) (128) (177) (182) (181) (137) (194) (230)
Other provisions - - - (14) - - - (29) - - - -
Other income 27 22 17 13 13 12 6 9 4 10 10 17
Pre-Tax 1,169 1,099 1,067 983 1,272 1,143 1,234 1,012 1,378 1,345 1,317 1,186
Tax (167) (162) (152) (134) (199) (180) (193) (141) (215) (197) (204) (168)
Profit before MI 1,002 937 915 849 1,073 963 1,041 871 1,163 1,148 1,113 1,018
MI and EO (52) (50) (53) (47) (40) (33) (33) (33) (30) (31) (30) (64)
Core profit 950 887 862 802 1,033 930 1,008 838 1,133 1,117 1,083 954
Source: J.P. Morgan estimates, Company data.
Table 16: DBS: Quarterly DuPont
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15E 4Q15E
NIM (% of avg. IEA) 1.64% 1.62% 1.60% 1.61% 1.65% 1.67% 1.68% 1.71% 1.69% 1.75% 1.78% 1.82%
IEA/Assets 90.48% 89.94% 88.59% 89.36% 88.85% 89.48% 89.67% 89.92% 90.61% 89.10% 89.51% 89.17%
Margins (% of avg.
Assets) 1.48% 1.46% 1.42% 1.44% 1.47% 1.49% 1.51% 1.54% 1.53% 1.56% 1.59% 1.63%
Non-IR contribution 42.7% 40.1% 34.6% 32.4% 39.3% 32.7% 36.3% 28.5% 38.2% 35.2% 35.3% 31.0%
Non-IR/Avg. Assets 1.09% 0.98% 0.76% 0.69% 0.94% 0.72% 0.87% 0.62% 0.93% 0.84% 0.88% 0.74%
Revenue/Assets 2.55% 2.43% 2.18% 2.14% 2.39% 2.21% 2.39% 2.16% 2.44% 2.40% 2.48% 2.37%
Cost/Income 41.09% 42.75% 44.14% 47.88% 42.47% 45.57% 44.11% 48.12% 43.17% 45.28% 44.92% 47.13%
C/Assets 1.05% 1.04% 0.96% 1.03% 1.01% 1.01% 1.05% 1.04% 1.05% 1.09% 1.11% 1.12%
Pre-Provision ROA 1.5% 1.4% 1.2% 1.1% 1.4% 1.2% 1.3% 1.1% 1.4% 1.3% 1.4% 1.3%
LLP/Loans -0.40% -0.42% -0.25% -0.22% -0.24% -0.20% -0.27% -0.27% -0.26% -0.19% -0.27% -0.32%
Loan/Assets 60.70% 61.25% 61.38% 61.92% 61.99% 61.88% 62.49% 62.93% 62.82% 63.35% 64.61% 63.93%
Other
Income/Assets 0.03% 0.02% 0.02% 0.00% 0.01% 0.01% 0.01% -0.02% 0.00% 0.01% 0.01% 0.02%
Operating ROA 1.26% 1.13% 1.07% 0.98% 1.23% 1.08% 1.17% 0.95% 1.22% 1.19% 1.19% 1.05%
Pre-Tax ROA 1.29% 1.16% 1.08% 0.98% 1.24% 1.09% 1.17% 0.94% 1.23% 1.20% 1.20% 1.06%
-
Tax Rate 14.29% -14.74% -14.25% -13.63% -15.64% -15.75% -15.64% -13.93% -15.60% -14.65% -15.50% -14.15%
Minorities & Outside
Int. -0.06% -0.05% -0.05% -0.05% -0.04% -0.03% -0.03% -0.03% -0.03% -0.03% -0.03% -0.06%
Core ROA 1.05% 0.93% 0.88% 0.80% 1.01% 0.89% 0.96% 0.77% 1.01% 1.00% 0.99% 0.86%
Core RoRWA 1.67% 1.47% 1.44% 1.35% 1.70% 1.50% 1.60% 1.29% 1.70% 1.66% 1.62% 1.42%
Equity/Assets 8.83% 8.53% 8.21% 8.20% 8.31% 8.38% 8.47% 8.42% 8.39% 8.56% 8.85% 8.87%
Core ROE 11.85% 10.94% 10.66% 9.74% 12.12% 10.61% 11.31% 9.20% 12.04% 11.64% 11.14% 9.65%
45

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Table 17: DBS: Annual forecasts

S$ in mn 2011 2012 2013 2014 2015E 2016E 2017E
Interest Income 6,555 7,621 7,986 8,948 9,787 11,373 13,890
Interest Expense (1,730) (2,336) (2,417) (2,627) (2,764) (3,578) (5,032)
Net Interest Income 4,825 5,285 5,569 6,321 7,022 7,795 8,857
Non-Interest Income 2,759 2,779 3,358 3,297 3,776 4,207 4,688
Net Fee income 1,542 1,579 1,885 2,027 2,270 2,543 2,848
Trading income 680 689 1,095 901 1,081 1,189 1,308
Other operating income 537 511 378 369 424 475 532
Total Revenues 7,584 8,064 8,927 9,618 10,798 12,003 13,546
Costs (3,303) (3,614) (3,918) (4,330) (4,871) (5,296) (5,751)
PPOP 4,281 4,450 5,009 5,288 5,927 6,707 7,795
Loan loss provisions (672) (409) (756) (638) (742) (1,031) (1,419)
Other provisions (50) (8) (14) (29) - - -
Pre-Tax 3,686 4,157 4,318 4,661 5,226 5,718 6,419
Tax (443) (588) (615) (713) (784) (858) (963)
Profit before MI 3,243 3,569 3,703 3,948 4,442 4,860 5,456
MI & EO (255) (210) (202) (139) (156) (171) (191)
Core profit 2,988 3,359 3,501 3,809 4,286 4,689 5,265
Table 18: DBS: Annual DuPont

2010 2011 2012 2013 2014 2015E 2016E 2017E
NIM (% of avg. IEA) 1.84% 1.77% 1.70% 1.62% 1.68% 1.77% 1.88% 2.00%
IEA/Assets 86.6% 87.4% 89.7% 91.3% 89.3% 89.1% 88.9% 89.0%
Margins (% of avg. Assets) 1.59% 1.55% 1.52% 1.48% 1.50% 1.57% 1.67% 1.78%
Non-IR contribution 38.89% 36.38% 34.46% 37.62% 34.28% 34.97% 35.05% 34.61%
Non-IR/Avg. Assets 1.01% 0.88% 0.80% 0.89% 0.78% 0.85% 0.90% 0.94%
Revenue/Assets 2.61% 2.43% 2.32% 2.36% 2.28% 2.42% 2.57% 2.72%
Cost/Income 41.4% 43.6% 44.8% 43.9% 45.0% 45.1% 44.1% 42.5%
C/Assets 1.08% 1.06% 1.04% 1.04% 1.03% 1.09% 1.14% 1.15%
Pre-Provision ROA 1.53% 1.37% 1.28% 1.33% 1.26% 1.33% 1.44% 1.56%
LLP/Loans -0.59% -0.38% -0.20% -0.32% -0.24% -0.26% -0.35% -0.45%
Loan/Assets 52.97% 56.26% 59.20% 61.72% 63.05% 63.22% 63.07% 62.78%
Other Income/Assets 0.01% 0.02% 0.03% 0.02% 0.00% 0.01% 0.01% 0.01%
Operating ROA 1.23% 1.18% 1.20% 1.14% 1.11% 1.17% 1.23% 1.29%
Pre-Tax ROA 1.23% 1.18% 1.20% 1.14% 1.11% 1.17% 1.23% 1.29%
Tax Rate -13.6% -12.0% -14.1% -14.2% -15.3% -15.0% -15.0% -15.0%
Minorities & Outside Int. -0.08% -0.08% -0.06% -0.05% -0.03% -0.03% -0.04% -0.04%
Core ROA 0.98% 0.96% 0.97% 0.93% 0.90% 0.96% 1.01% 1.06%
Core RoRWA 1.47% 1.51% 1.56% 1.54% 1.52% 1.60% 1.66% 1.72%
Equity/Assets 9.49% 8.79% 8.66% 8.61% 8.35% 8.57% 8.83% 8.94%
Core ROE 10.3% 10.9% 11.2% 10.8% 10.8% 11.2% 11.4% 11.8%
46

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Table 19: DBS: Common size statement
Common Size 2011 2012 2013 2014 2015 2016E 2017E

ASSETS
Loans 57.0% 59.6% 61.9% 62.5% 62.3% 62.1% 61.5%
Other IEA 31.3% 31.2% 30.0% 29.6% 29.2% 29.4% 30.0%
Other Non IEA 11.7% 9.1% 8.1% 7.9% 8.5% 8.5% 8.5%
Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
LIABILITIES
Deposits 66.1% 71.8% 72.7% 72.0% 70.2% 69.8% 69.5%
Other IBL 16.2% 9.8% 10.5% 12.0% 12.6% 13.0% 13.4%
Other Liabilities 8.0% 8.2% 7.4% 6.9% 7.7% 7.7% 7.5%
Equity 9.7% 10.2% 9.4% 9.1% 9.5% 9.6% 9.6%
Total Liabilities 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Table 20: DBS: YoY growth
YoY Growth 2011 2012 2013 2014 2015 2016E 2017E

ASSETS
Loans 28.1% 8.4% 18.1% 10.8% 2.2% 6.0% 6.1%
Other IEA 6.1% 3.3% 9.5% 7.9% 1.6% 6.7% 9.6%
Other Non IEA 26.8% -19.1% 1.2% 6.9% 10.1% 6.9% 7.0%
Total Assets 20.1% 3.6% 13.9% 9.6% 2.6% 6.3% 7.2%
LIABILITIES
Deposits 16.3% 12.5% 15.3% 8.5% 0.1% 5.7% 6.9%
Other IBL 46.7% -37.3% 22.0% 25.0% 7.7% 10.0% 10.0%
Equity -0.1% 8.9% 4.7% 6.7% 6.9% 7.2% 7.8%
Figure 99: DBS: LDR
47

(65) 6882- 2450 20 August 2015
P&L Sensitivity
Figure 100: Impact for every 5% change to revenue growth
Figure 101: Impact for every 10bps change to NIMs
Figure 102: Impact for every 10bps change to credit costs
48

(65) 6882- 2450 20 August 2015
Key Metrics
Figure 103: Return on equity Figure 104: Return on assets
% %
Source: Company reports and J.P. Morgan estimates. Source: Company reports and J.P. Morgan estimates.
Figure 105: Operating return on assets Figure 106: Net interest margin
% %
Figure 107: Credit costs Figure 108: Loan growth

% %
49

(65) 6882- 2450 20 August 2015
Valuation Charts
Figure 109: P/E Figure 110: P/B
Figure 111: Dividend yield Figure 112: P/PPOP

%
Figure 113: P/Deposits Figure 114: P/NTA

%
50

(65) 6882- 2450 20 August 2015
DBS Group Holdings: Summary of Financials

Income Statement Growth Rates
S$ in millions, year end Dec FY13 FY14 FY15E FY16E FY17E FY13 FY14 FY15E FY16E FY17E
NIM (as % of avg. assets) 1.6% 1.6% 1.7% 1.8% 1.9% Loans 17.9% 10.7% 2.3% 6.2% 6.4%
Earning assets/assets 91.3% 89.3% 89.1% 88.9% 89.0% Deposits 15.3% 8.5% 0.1% 5.7% 6.9%
Margins (as % of Avg. Assets) 1.5% 1.4% 1.5% 1.6% 1.7% Assets 13.9% 9.6% 2.6% 6.3% 7.2%
Equity 5.9% 10.4% 7.5% 7.8% 8.4%
Net Interest Income 5,569 6,321 7,022 7,795 8,857 RWA 10.4% 11.0% 2.7% 8.1% 9.0%
Total Non-Interest Income 3,358 3,297 3,776 4,207 4,688 Net Interest Income 5.4% 13.5% 11.1% 11.0% 13.6%
Fee Income 1,885 2,027 2,270 2,543 2,848 Non-Interest Income 20.8% (1.8%) 14.5% 11.4% 11.4%
Dealing Income 1,095 901 1,081 1,189 1,308 of which Fee Grth 19.4% 7.5% 12.0% 12.0% 12.0%
Revenues 10.7% 7.7% 12.3% 11.2% 12.9%
Total operating revenues 8,927 9,618 10,798 12,003 13,546 Costs 8.4% 10.5% 12.5% 8.7% 8.6%
Pre-Provision Profits 12.6% 5.6% 12.1% 13.1% 16.2%
Operating costs (3,918) (4,330) (4,871) (5,296) (5,751) Loan Loss Provisions 84.8% (15.6%) 16.3% 38.9% 37.7%
Pre-Prov. Profits 5,009 5,288 5,927 6,707 7,795 Pre-Tax (2.6%) 9.1% 9.5% 6.6% 12.3%
Provisions (756) (638) (742) (1,031) (1,419) Attributable Income (3.6%) 10.2% 9.3% 6.0% 12.3%
Other Inc 157 208 136 0 0 EPS (4.7%) 9.5% 8.7% 4.2% 10.3%
Other Exp. 0 0 0 0 0 DPS 3.6% 0.0% 3.4% 3.3% 3.2%
Exceptionals - - - - -
Associate 79 40 41 42 42 Balance Sheet Gearing FY13 FY14 FY15E FY16E FY17E
Pre-tax 4,489 4,898 5,362 5,718 6,419 Loan/deposit 85.0% 86.9% 88.7% 89.0% 88.4%
Tax (615) (713) (784) (858) (963) Investment/assets 16.6% 15.5% 16.3% 16.9% 16.8%
Minorities (202) (139) (156) (171) (191) Loan/Assets 61.7% 63.1% 63.2% 63.1% 62.8%
Attributable Income 3,672 4,046 4,422 4,689 5,265 Customer deposits/liab. 80.1% 79.0% 77.4% 77.0% 76.8%
LT debt/liabilities 11.3% 12.4% 13.5% 14.1% 14.6%
Per Share Data SGD FY13 FY14 FY15E FY16E FY17E Asset Quality/Capital FY13 FY14 FY15E FY16E FY17E
EPS 1.49 1.63 1.77 1.84 2.03 Loan loss reserves/loans (1.4%) (1.3%) (1.3%) (1.5%) (1.7%)
DPS 0.58 0.58 0.60 0.62 0.64 NPLs/loans 1.2% 1.0% 1.0% 1.3% 1.7%
Payout 39.0% 35.6% 33.9% 33.6% 31.5% Loan loss reserves/NPLs 124.1% 133.8% 128.7% 103.3% 92.1%
Book value 13.50 14.74 15.57 16.49 17.56 Growth in NPLs 9.7% (16.1%) 34.6% 43.8% 32.4%
Fully Diluted Shares 2,472 2,487 2,501 2,544 2,589 Tier 1 Ratio 13.7% 13.1% 14.1% 14.4% 14.7%
PPOP per share 2.05 2.15 2.38 2.64 3.02 Total CAR 16.3% 15.3% 16.2% 16.4% 16.4%
Key Balance sheet S$ in millions FY13 FY14 FY15E FY16E FY17E Du-Pont Analysis FY13 FY14 FY15E FY16E FY17E
Net Loans 248,654 275,588 281,704 298,633 316,885 NIM (as % of avg. assets) 1.6% 1.6% 1.7% 1.8% 1.9%
LLR (3,527) (3,566) (3,737) (4,465) (5,561) Earning assets/assets 91.3% 89.3% 89.1% 88.9% 89.0%
Gross Loans 252,181 279,154 285,441 303,098 322,446 Margins (as % of Avg. Assets) 1.5% 1.4% 1.5% 1.6% 1.7%
NPLs 2,882 2,419 3,256 4,684 6,199 Non-Int. Rev./ Revenues 37.6% 34.3% 35.0% 35.1% 34.6%
Investments 62,209 68,452 76,666 81,266 86,142 Non IR/Avg. Assets 0.9% 0.8% 0.8% 0.9% 0.9%
Other earning assets 26,351 28,244 31,633 34,164 36,897 Revenue/Assets 2.4% 2.3% 2.4% 2.6% 2.7%
Avg. IEA 344,569 376,291 397,827 414,611 443,212 Cost/Income 43.9% 45.0% 45.1% 44.1% 42.5%
Goodwill 0 0 0 0 0 Cost/Assets 1.0% 1.0% 1.1% 1.1% 1.2%
Assets 402,008 440,666 452,338 480,848 515,512 Pre-Provision ROA 1.3% 1.3% 1.3% 1.4% 1.6%
LLP/Loans (0.3%) (0.2%) (0.3%) (0.4%) (0.5%)
Deposits 292,365 317,173 317,430 335,416 358,406 Loan/Assets 61.7% 63.1% 63.2% 63.1% 62.8%
Long-term bond funding 42,231 52,804 56,888 62,577 68,835 Other Prov, Income/ Assets 0.1% 0.1% 0.0% 0.0% 0.0%
Other Borrowings 11,551 12,709 13,980 15,378 16,916 Operating ROA 1.1% 1.1% 1.2% 1.2% 1.3%
Avg. IBL 321,117 350,525 372,148 386,156 412,617 Pre-Tax ROA 1.2% 1.2% 1.2% 1.2% 1.3%
Avg. Assets 377,521 421,337 446,502 466,593 498,180 Tax rate 13.7% 14.6% 14.6% 15.0% 15.0%
Common Equity 33,430 36,905 39,663 42,745 46,321 Minorities & Outside Distbn. 1.0% 0.7% 0.6% 0.5% 0.5%
RWA 238,081 264,186 271,403 293,317 319,618 ROA 1.0% 1.0% 1.0% 1.0% 1.1%
Avg. RWA 226,836 251,134 267,794 282,360 306,467 RORWA 1.6% 1.6% 1.7% 1.7% 1.7%
Equity/Assets 8.6% 8.3% 8.6% 8.8% 8.9%
ROE 11.3% 11.5% 11.6% 11.4% 11.8%
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United Overseas Bank (UOB)
United Overseas Bank Ltd (Reuters: UOBH.SI, Bloomberg: UOB SP)

Shares O/S (mn) 1,603 DPS (S$) 0.70 0.75 0.75 0.75 0.75 0.80
Fiscal Year End Dec EPS growth (%) 20.3% 8.0% 7.4% (3.2%) (5.1%) 0.7%
Price (S$) 19.82 ROE 12.3% 12.3% 12.2% 10.9% 9.9% 9.6%
Date Of Price 19 Aug 15 P/E (x) 11.7 10.8 10.0 10.4 10.9 10.9
3M - Avg daily val (S$ mn) 61.68 BVPS (S$) 14.44 15.36 17.09 17.89 18.59 19.23
3M - Avg daily val ($ mn) 43.9 P/BV (x) 1.37 1.29 1.16 1.11 1.07 1.03
3M - Avg daily vol (mn) 2.75 Dividend Yield 3.5% 3.8% 3.8% 3.8% 3.8% 4.0%
FTSTI 3049.65 Fully Diluted EPS (S$) 1.70 1.84 1.97 1.91 1.81 1.82
Price Target (S$) 19.00

United Overseas Bank (UOB) (Underweight; Price Target: S$19.00)
Investment Thesis
We maintain our structural UW on UOB. Key points:
 Higher rates would have a very different impact on UOB’s earnings vs. the
2005-06 rate cycle. In the current cycle, a 100bps move in rate would lead
to NII increase of S$300-400mn (as per the bank), and S$180mn pick-up in
credit costs as debt servicing burden for borrowers will move up (as per
JPMe). Hence, the net gains from even a 100bp rate hike would be rather
limited. This is very different from the situation in 2005-06, when the bank's
earnings increased by 50% y/y in FY06 for a 194bp move-up in SIBOR.
 We worry about the bank’s real estate exposure, specially the investment
property loans (about 30% of Singapore mortgages) and small- and
medium-sized developers (about 30-40%) of total developer book in
Singapore. The bank has delivered 14% growth in mortgages in the last five
years and 17% growth in building and construction loans, which poses risks
of NPL formation. Following the large NPL formation in 2Q last year, we
have become wary of credit underwriting standards for real estate loans at
the bank.
 After 1H15 NIM pick-up, we do not see any more avenues of margin
expansion at the bank as 94% SG$ LDR (84% group LDR) and mid-50’s
SG$ CASA (42% group CASA) limit the bank’s ability to manage funding
costs at a point in time when system liquidity is running very tight. Our
2015/16 estimates are 4%/15% below the Street and we see limited drivers
for the stock in the near term.
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(65) 6882- 2450 20 August 2015
 While the recent correction provides a degree of value to the stock but we
do not see any catalyst for the stock to move higher. Accordingly, UOB
stays a relative UW in the sector.
Valuation
Our Jun-16 PT of S$19 is based upon a 2-stage DDM. We use a fair P/BV multiple

Key upside risks to our view include meaningful easing in deposit competition,
elevated trading gains, and better asset quality.
53

(65) 6882- 2450 20 August 2015
• Asset quality issues in real estate loans • Lack of asset quality deterioration • Higher than expected deposit costs
• Margin to remain under pressure • Better than expected margins
• Effective tax rate to rise • Easing deposit competition
Key financial metrics FY14A FY15E FY16E FY17E Valuation and price target basis
NII (LC) 4,558 4,907 5,337 5,916 Our Jun-16 PT is based upon 2-stage DDM. We use a fair P/B
Total rev enue (LC) 7,357 7,930 8,510 9,365
based multiple of 0.98x , w ith normalized RoE of 9.6%.
Rev enue grow th (%) 9.5% 7.8% 7.3% 10.1%
Costs (LC) (3,146) (3,495) (3,749) (4,003)
PPOP (LC) 4,211 4,435 4,761 5,362
LLP (LC) (572) (695) (1,117) (1,607)
Net income (LC) 3,136 3,090 2,991 3,071
CIR (%) 42.8% 44.1% 44.1% 42.7%
LLP/Loans (%) 0.30% 0.34% 0.53% 0.72% Cost of capital 9.75%
ROE (%) 12.2% 10.9% 9.9% 9.6% Fair PB 0.98x
Tier 1 capital (%) 13.9% 14.6% 15.1% 15.2%
Key model assumptions FY14A FY15E FY16E FY17E PV of today 's Fair Value S$17.3
Loan growth 9.5% 3.5% 4.7% 6.7% PV of Jun-16 fair value S$19.0
NIMs (%) 1.71% 1.76% 1.81% 1.90%
So urce: Company and J.P. M o rgan estimates.

5% change on revenue growth 8.3% 8.3% 10.1% 11.1% JPMe old 1.94 1.99
1% change in CIR 1.8% 1.8% 2.2% 2.4% % chg -2% -9%
10bps change in credit costs 0.0% 0.0% 5.5% 5.9% Consensus 1.98 2.14

S$ S$ 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016
DBS 18.71 OW 21.0 1.20 1.13 10.5 10.1 1.77 1.85 1.2% -4.2% 11.6% 11.4%
UOB 19.82 UW 19.0 1.11 1.07 10.4 10.9 1.91 1.81 -3.7% -15.5% 10.9% 9.9%
OCBC 9.45 OW 10.5 1.21 1.16 10.0 9.8 0.94 0.96 -1.2% -5.9% 12.3% 12.0%
Average 1.17 1.12 10.3 10.3 -1.2% -8.5% 11.6% 11.1%
Source: J.P. Morgan estimates, Bloomberg. Prices as of 19th August, 2015.
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Table 22: UOB: Quarterly forecasts

S$ in million 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15E 4Q15E
Interest Income 1,552 1,606 1,640 1,710 1,744 1,761 1,811 1,874 1,902 1,938 1,978 2,050
Net Interest Income 964 1,015 1,046 1,095 1,109 1,124 1,155 1,170 1,200 1,213 1,227 1,267
Non-Interest Income 708 627 617 649 642 660 816 681 755 713 783 772
Net Fee income 453 436 407 435 414 410 475 450 453 465 479 492
Trading income 158 99 142 145 149 150 258 160 225 156 210 183
Other operating income 97 92 68 69 79 100 83 71 77 92 94 97
Total Revenues 1,672 1,642 1,663 1,744 1,751 1,784 1,971 1,851 1,955 1,926 2,010 2,039
Costs (696) (726) (715) (760) (755) (787) (799) (805) (852) (876) (884) (883)
PPOP 976 916 948 984 996 997 1,172 1,046 1,103 1,050 1,126 1,156
Other provisions (7) 52 (30) (37) (35) 2 (16) (14) (34) (16) (16) (14)
Other income 24 101 54 11 43 26 37 43 4 40 50 55
Pre-Tax 870 942 916 856 882 873 1,046 924 938 937 955 979
Tax (143) (156) (182) (78) (89) (161) (176) (135) (133) (173) (153) (132)
Profit before MI 727 786 734 778 793 712 870 789 805 764 803 847
MI & EO (5) (4) (4) (4) (5) (5) (3) (2) (4) (3) (3) (5)
Core Profit 722 782 730 774 788 707 867 787 801 761 799 842
Attributable profit 722 782 730 774 788 807 867 787 801 761 799 842
Table 23: UOB: Quarterly DuPont

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15E 4Q15E
NIM (% of avg. IEA) 1.70% 1.71% 1.71% 1.74% 1.73% 1.71% 1.71% 1.69% 1.75% 1.77% 1.76% 1.78%
IEA/Assets 88.59% 87.95% 88.53% 89.32% 89.62% 89.11% 89.35% 90.27% 89.47% 88.09% 88.14% 88.15%
Margins (% of avg. Assets) 1.50% 1.51% 1.52% 1.56% 1.55% 1.52% 1.53% 1.52% 1.57% 1.56% 1.55% 1.57%
Non-IR/Avg. Assets 1.09% 0.93% 0.90% 0.93% 0.89% 0.89% 1.09% 0.89% 0.97% 0.91% 1.00% 0.97%
Revenue/Assets 2.57% 2.43% 2.43% 2.50% 2.41% 2.41% 2.63% 2.43% 2.52% 2.47% 2.57% 2.55%
Cost/Income 41.63% 44.21% 42.99% 43.58% 43.12% 44.11% 40.54% 43.49% 43.58% 45.48% 43.99% 43.30%
C/Assets 1.07% 1.07% 1.05% 1.09% 1.04% 1.06% 1.07% 1.06% 1.10% 1.12% 1.13% 1.10%
LLP/Loans -0.30% -0.30% -0.13% -0.23% -0.26% -0.32% -0.30% -0.31% -0.27% -0.27% -0.40% -0.43%
Loan/Assets 62.20% 62.92% 63.85% 64.31% 63.87% 64.38% 64.88% 64.86% 64.91% 65.05% 64.87% 64.13%
Other Income/Assets 0.03% 0.23% 0.04% -0.04% 0.01% 0.04% 0.03% 0.04% -0.04% 0.03% 0.04% 0.05%
Operating ROA 1.31% 1.17% 1.30% 1.27% 1.21% 1.14% 1.37% 1.17% 1.25% 1.17% 1.18% 1.17%
Pre-Tax ROA 1.34% 1.39% 1.34% 1.23% 1.22% 1.18% 1.40% 1.21% 1.21% 1.20% 1.22% 1.22%
- - - - - - - - - - -
Tax Rate 16.44% 16.56% 19.87% -9.11% 10.09% 18.44% 16.83% 14.61% 14.18% 18.46% 16.00% 13.44%
ROA 1.08% 1.13% 1.03% 1.05% 1.05% 1.05% 1.12% 1.00% 1.00% 0.94% 0.98% 1.02%
RoRWA 1.99% 2.04% 1.82% 1.82% 1.86% 1.89% 1.98% 1.73% 1.71% 1.61% 1.68% 1.74%
Equity/Assets 9.06% 8.83% 8.61% 8.56% 8.49% 8.60% 8.73% 8.83% 9.03% 9.14% 9.18% 9.12%
ROE 11.87% 12.82% 11.98% 12.32% 12.33% 12.22% 12.82% 11.28% 11.03% 10.28% 10.73% 11.14%
55

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Table 24: UOB: Annual forecasts

S$ in million 2011 2012 2013 2014 2015E 2016E 2017E
Interest Income 5,640 6,202 6,508 7,190 7,868 8,899 10,522
Net Fee income 1,318 1,508 1,731 1,749 1,889 2,002 2,162
Trading income 392 673 544 717 774 774 852
Other operating income 310 397 326 333 360 396 435
Total Revenues 5,697 6,495 6,721 7,357 7,930 8,510 9,365
Costs (2,450) (2,747) (2,897) (3,146) (3,495) (3,749) (4,003)
PPOP 3,247 3,748 3,824 4,211 4,435 4,761 5,362
Loan loss provisions (466) (456) (408) (572) (695) (1,117) (1,607)
Other provisions (68) (28) (22) (63) (80) (80) (80)
Other income 93 87 190 149 149 149 156
Pre-Tax 2,806 3,351 3,584 3,725 3,809 3,713 3,832
Tax (467) (531) (559) (561) (590) (594) (632)
Profit before MI 2,339 2,820 3,025 3,164 3,219 3,119 3,200
MI & EO (14) (17) (17) (15) (15) (15) (15)
Core Profit 2,325 2,803 3,008 3,149 3,203 3,104 3,184
Attributable profits 2,325 2,803 3,008 3,249 3,203 3,104 3,184
Table 25: UOB: Annual DuPont

2011 2012 2013 2014 2015E 2016E 2017E
NIM (% of avg. IEA) 1.92% 1.87% 1.72% 1.71% 1.76% 1.81% 1.90%
IEA/Assets 85.15% 85.38% 89.31% 90.29% 88.73% 88.72% 88.85%
Margins (% of avg. Assets) 1.63% 1.60% 1.53% 1.54% 1.56% 1.61% 1.69%
Non-IR contribution 35.46% 39.69% 38.70% 38.05% 38.12% 37.28% 36.83%
Non-IR/Avg. Assets 0.90% 1.05% 0.97% 0.95% 0.96% 0.96% 0.99%
Revenue/Assets 2.53% 2.65% 2.50% 2.49% 2.52% 2.57% 2.68%
Cost/Income 43.01% 42.29% 43.10% 42.76% 44.07% 44.05% 42.75%
C/Assets 1.09% 1.12% 1.08% 1.06% 1.11% 1.13% 1.14%
Pre-Provision ROA 1.44% 1.53% 1.42% 1.43% 1.41% 1.44% 1.53%
LLP/Loans -0.4% -0.3% -0.2% -0.3% -0.3% -0.5% -0.7%
Loan/Assets 57.48% 61.20% 62.90% 64.53% 64.37% 63.66% 63.85%
Other Income/Assets 0.01% 0.02% 0.06% 0.03% 0.02% 0.02% 0.02%
Operating ROA 1.23% 1.34% 1.27% 1.23% 1.19% 1.10% 1.07%
Pre-Tax ROA 1.25% 1.37% 1.33% 1.26% 1.21% 1.12% 1.10%
Tax Rate -16.64% -15.85% -15.60% -15.06% -15.50% -16.00% -16.50%
ROA 1.0% 1.1% 1.1% 1.1% 1.0% 0.9% 0.9%
RoRWA 1.85% 2.02% 1.95% 1.82% 1.68% 1.54% 1.48%
Equity/Assets 8.91% 8.93% 8.78% 8.73% 8.99% 9.08% 9.11%
ROE 11.07% 12.34% 12.32% 12.15% 10.91% 9.93% 9.64%
56

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Table 26: UOB: Common size statement
Common Size 2011 2012 2013 2014 2015 2016E 2017E

ASSETS
Loans 59.6% 60.5% 62.9% 63.9% 62.7% 62.4% 62.9%
Other IEA 33.4% 33.3% 31.5% 31.0% 32.1% 32.4% 32.0%
Other Non IEA 7.0% 6.2% 5.5% 5.1% 5.2% 5.2% 5.1%
Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
LIABILITIES
Deposits 71.5% 72.0% 75.5% 76.2% 76.4% 75.9% 75.6%
Other IBL 13.3% 13.6% 11.5% 10.5% 10.1% 10.6% 11.0%
Equity 9.8% 10.0% 9.4% 9.7% 9.8% 9.8% 9.8%
Table 27: UOB: YoY growth
YoY Growth 2011 2012 2013 2014 2015 2016E 2017E

ASSETS
Loans 25.6% 8.3% 17.0% 9.5% 3.5% 4.7% 6.5%
Other IEA -7.7% 6.3% 6.5% 6.0% 9.2% 6.2% 4.4%
Other Non IEA 6.7% -4.7% -0.2% 0.5% 6.6% 4.2% 4.2%
Total Assets 10.8% 6.7% 12.4% 7.9% 5.4% 5.1% 5.7%
LIABILITIES
Deposits 19.1% 7.4% 17.9% 9.0% 5.7% 4.4% 5.3%
Other IBL -17.3% 8.9% -4.8% -1.6% 1.9% 10.0% 9.5%
Other Liabilities 9.5% -12.1% -7.5% 5.9% 7.0% 5.0% 5.0%
Equity 6.9% 9.2% 5.2% 12.0% 6.3% 5.5% 5.1%
Figure 115: UOB: LDR
57

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P&L Sensitivity
Figure 116: Impact of 5% change in revenue
Figure 117: Impact of 10bps change to NIM
Figure 118: Impact of 10bps change to credit costs
58

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Key Metrics
% %
% %

% %
59

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Valuation Charts

%

%
60

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United Overseas Bank (UOB): Summary of Financials

Equity 5.6% 13.1% 6.8% 5.9% 5.5%
Fee Income 1,731 1,749 1,889 2,002 2,162 Non-Interest Income 0.9% 7.6% 8.0% 4.9% 8.7%
Dealing Income 544 717 774 774 852 of which Fee Grth 14.8% 1.0% 8.0% 6.0% 8.0%
Revenues 3.5% 9.5% 7.8% 7.3% 10.1%
Pre-Provision Profits 2.0% 10.1% 5.3% 7.4% 12.6%
Operating costs (2,897) (3,146) (3,495) (3,749) (4,003) Loan Loss Provisions (10.5%) 40.2% 21.5% 60.7% 43.9%
Pre-Prov. Profits 3,824 4,211 4,435 4,761 5,362 Pre-Tax 7.0% 6.7% (0.4%) (2.5%) 3.2%
Provisions (408) (572) (695) (1,117) (1,607) Attributable Income 7.6% 7.9% (1.5%) (3.2%) 2.7%
Other Inc - - - - - EPS 8.0% 7.4% (3.2%) (5.1%) 0.7%
Other Exp. (22) 37 (80) (80) (80) DPS 7.1% 0.0% 0.0% 0.0% 6.7%
Exceptionals - - - - -
DPS 0.75 0.75 0.75 0.75 0.80 NPLs/loans 1.3% 1.2% 1.3% 1.6% 1.9%
Book value 15.36 17.09 17.89 18.59 19.23 Growth in NPLs (12.2%) 13.7% 25.9% 28.2% 28.7%
LLP/Loans (0.2%) (0.3%) (0.3%) (0.5%) (0.7%)
Long-term bond funding 32,687 32,179 32,802 36,092 39,508 Other Prov, Income/ Assets 0.1% 0.1% 0.0% 0.0% 0.0%
Other Borrowings 7,474 8,560 9,416 10,169 10,474 Operating ROA 1.3% 1.2% 1.2% 1.1% 1.1%
RWA 164,911 178,792 188,479 200,547 215,625 ROA 1.1% 1.1% 1.0% 0.9% 0.9%
Avg. RWA 149,007 171,852 183,635 194,513 208,086 RORWA 1.9% 1.8% 1.7% 1.5% 1.5%
Equity/Assets 8.8% 8.7% 9.0% 9.1% 9.1%
ROE 12.3% 12.2% 10.9% 9.9% 9.6%
61

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OCBC Bank
Oversea-Chinese Banking Corporation Ltd (Reuters: OCBC.SI, Bloomberg: OCBC SP)

Shares O/S (mn) 3,984 DPS (S$) 0.33 0.34 0.36 0.36 0.37 0.38
Fiscal Year End Dec EPS growth (%) 72.1% (32.9%) 35.1% (8.1%) 2.1% 7.6%
Price (S$) 9.45 ROE 17.8% 11.5% 14.2% 12.3% 12.0% 12.3%
Date Of Price 19 Aug 15 P/E (x) 8.4 12.5 9.2 10.0 9.8 9.1
3M - Avg daily val (S$ mn) 57.11 BVPS (S$) 6.68 6.91 7.46 7.83 8.17 8.57
3M - Avg daily val ($ mn) 40.7 P/BV (x) 1.42 1.37 1.27 1.21 1.16 1.10
3M - Avg daily vol (mn) 5.65 Dividend Yield 3.5% 3.6% 3.8% 3.8% 3.9% 4.0%
FTSTI 3049.65 Fully Diluted EPS (S$) 1.13 0.76 1.02 0.94 0.96 1.03
Price Target (S$) 10.50

OCBC Bank (Overweight; Price Target: S$10.50)
Investment Thesis
We believe OCBC is now best positioned among Singapore banks to pursue organic
growth after the Wing Hang deal and rights.
 We expect the bank to reach an 11.5%-12% CET1 over the next 2-4
quarters, addressing a key investor concern.
 There are three drivers of capital accumulation for the bank – move to IRB
at Bank of Singapore, IRB at OCBC Wing Hang and DRP (ongoing).
 As the fully phased in CET1 (11.2% in 2Q) accumulates quarter on quarter,
we expect the worries to dissipate slowly but steadily, leading to gradual re-
rating.
 On earnings, a pick-up in HK treasury sales and higher revenues at BoS /
brokerage given recent equity volumes in Asia poses upside risks.
 The NIM benefit at OCBC from higher rates also appears to be under-
appreciated as the bank’s CASA (46%) base was built up during low rate
environment (2006-12), and as soon as 2H15, we expect NIM pick-up
(+6bps h/h) starting to show up.
 The stock has weakened recently (-9% YTD) on weak 2Q and perceived
lack of near term drivers, which allows medium term investors to build
position in a high-quality franchise at undemanding valuations.
Valuation
Our Jun-16 PT of S$10.5 is based upon a 2-stage DDM. We use a fair P/BV multiple
62

(65) 6882- 2450 20 August 2015

Key downside risks include asset quality deterioration (Singapore property, Macau
and Indonesia), faster-than-expected unwind of the China trade book, lack of NIM
expansion despite Sibor/SoR moves in last six months and slower-than-expected
capital accumulation.
63

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• Expect bank to reach 11.5% -12% CET1 • Lower than expected asset quality deterioration • Acceleration of macro issues in China,
over next 2-4 quarters • Higher credit growth especially in Pearl River delta and Macau
• Ongoing consolidation in WM business • NPLs in Indonesia
should lead to better returns in the business
• Increase in contribution from Bank Ningbo
Key financial metrics FY14A FY15E FY16E FY17E Valuation and price target basis
NII (LC) 4,736 5,167 5,619 6,470 Our Jun-16 PT is based upon 2-stage DDM. We use a fair P/B
Total rev enue (LC) 7,918 8,718 9,394 10,566
based multiple of 1.22x , w ith a normalised RoE of 11.5%
Rev enue grow th (%) 19.6% 10.1% 7.8% 12.5%
Costs (LC) (3,258) (3,734) (4,019) (4,381)
PPOP (LC) 4,660 4,983 5,375 6,185
LLP (LC) (359) (320) (448) (721)
Net income (LC) 3,842 3,839 4,028 4,457
CIR (%) 41.1% 42.8% 42.8% 41.5%
LLP/Loans (%) 0.19% 0.15% 0.21% 0.31% Cost of capital 9.75%
ROE (%) 12.6% 12.3% 12.0% 12.3% Fair PB 1.22x
Tier 1 capital (%) 13.8% 14.5% 15.3% 15.9%
Key model assumptions FY14A FY15E FY16E FY17E PV of today 's Fair Value S$9.6
Loan growth 23.7% 1.1% 5.0% 7.5% PB based Jun-16 Fair Value S$10.5
NIMs (%) 1.68% 1.66% 1.73% 1.88%
So urce: Company and J.P. M o rgan estimates.

5% change on revenue growth 7.9% 8.1% 8.9% 9.3% JPMe old 0.95 1.03
1% change in CIR 1.7% 1.7% 2.0% 2.0% % chg -1% -7%
10bps change in credit costs NA NA 4.7% 4.6% Consensus 0.95 1.02

S$ S$ 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016
DBS 18.71 OW 21.0 1.20 1.13 10.5 10.1 1.77 1.85 1.2% -4.2% 11.6% 11.4%
UOB 19.82 UW 19.0 1.11 1.07 10.4 10.9 1.91 1.81 -3.7% -15.5% 10.9% 9.9%
OCBC 9.45 OW 10.5 1.21 1.16 10.0 9.8 0.94 0.96 -1.2% -5.9% 12.3% 12.0%
Average 1.17 1.12 10.3 10.3 -1.2% -8.5% 11.6% 11.1%
64

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Table 29: OCBC: Quarterly forecasts

S$ in mn 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15E 4Q15E
Interest Income 1,458 1,524 1,557 1,635 1,707 1,776 2,025 2,099 2,108 2,105 2,160 2,261
Net Interest Income 912 961 978 1,032 1,087 1,126 1,246 1,277 1,249 1,282 1,301 1,334
Non-Interest Income 676 606 779 677 768 850 801 763 859 939 872 881
Net Fee income 316 347 352 340 353 353 406 383 395 438 429 442
Trading income 103 136 84 72 151 146 117 84 166 236 164 151
Other operating income 257 123 343 265 264 351 278 296 298 265 278 288
Total Revenues 1,588 1,567 1,757 1,709 1,855 1,976 2,047 2,040 2,108 2,221 2,173 2,216
Costs (672) (718) (681) (713) (706) (760) (870) (922) (873) (918) (965) (979)
PPOP 916 849 1,076 996 1,149 1,216 1,177 1,118 1,235 1,303 1,208 1,237
Other provisions (16) (15) (18) (11) (15) (2) (14) (41) (23) (25) (25) (27)
Other income 13 23 13 5 17 18 14 63 89 102 30 39
Pre-Tax 894 774 980 919 1,111 1,154 1,080 996 1,236 1,301 1,134 1,151
Tax (142) (149) (154) (152) (185) (172) (184) (146) (185) (191) (167) (181)
Minorities and Hybrids (56) (28) (67) (51) (59) (61) (55) (59) (58) (62) (54) (86)
Core Reported profits 696 597 759 716 867 921 841 791 993 1,048 914 885
Exceptional - - - - 32 - 391 (1) - - - -
Pref Dividends 27 27 14 14 14 14 14 14 14 14 14 14
Profits to Equity SHs 669 570 745 702 885 907 1,218 776 979 1,034 900 870
Table 30: OCBC: Quarterly Du-pont

S$ in mn 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15E 4Q15E
NIM (% of avg. IEA) 1.64% 1.64% 1.63% 1.64% 1.70% 1.70% 1.67% 1.67% 1.62% 1.67% 1.66% 1.68%
IEA/Assets 74.74% 75.69% 75.27% 75.65% 76.21% 76.76% 79.77% 76.73% 77.69% 76.78% 77.00% 76.89%
Margins (% of avg. Assets) 1.22% 1.24% 1.22% 1.24% 1.29% 1.31% 1.34% 1.28% 1.26% 1.28% 1.28% 1.29%
Non-IR/Avg. Assets 0.89% 0.78% 0.98% 0.82% 0.90% 0.98% 0.87% 0.77% 0.85% 0.94% 0.87% 0.86%
Revenue/Assets 2.10% 2.02% 2.22% 2.07% 2.18% 2.28% 2.21% 2.06% 2.09% 2.21% 2.16% 2.16%
Cost/Income 42.32% 45.82% 38.76% 41.72% 38.06% 38.46% 42.50% 45.20% 41.41% 41.33% 44.40% 44.17%
C/Assets 0.89% 0.92% 0.86% 0.87% 0.83% 0.88% 0.94% 0.93% 0.87% 0.91% 0.96% 0.95%
LLP/Loans -0.05% -0.22% -0.23% -0.17% -0.09% -0.18% -0.20% -0.28% -0.12% -0.15% -0.15% -0.18%
Loan/Assets 48.37% 49.41% 50.59% 50.28% 50.56% 50.96% 51.66% 52.30% 52.15% 52.33% 52.10% 51.39%
Other Income/Assets 0.00% 0.01% -0.01% -0.01% 0.00% 0.02% 0.00% 0.02% 0.07% 0.08% 0.00% 0.01%
Operating ROA 1.19% 0.99% 1.24% 1.12% 1.30% 1.32% 1.17% 0.98% 1.16% 1.22% 1.12% 1.11%
Pre-Tax ROA 1.18% 1.00% 1.24% 1.12% 1.30% 1.33% 1.17% 1.01% 1.23% 1.30% 1.13% 1.12%
Tax Rate -15.9% -19.3% -15.7% -16.5% -16.7% -14.9% -17.0% -14.7% -15.0% -14.7% -14.7% -15.7%
Minorities & Outside Int. -0.07% -0.04% -0.08% -0.06% -0.07% -0.07% -0.06% -0.06% -0.06% -0.06% -0.05% -0.08%
Preference Dividends -0.04% -0.03% -0.02% -0.02% -0.02% -0.02% -0.02% -0.01% -0.01% -0.01% -0.01% -0.01%
Core ROA 0.89% 0.73% 0.94% 0.85% 1.00% 1.05% 0.89% 0.78% 0.97% 1.03% 0.89% 0.85%
Core RoRWA 1.98% 1.58% 2.02% 1.89% 2.22% 2.29% 1.91% 1.66% 2.03% 2.13% 1.84% 1.73%
Equity/Assets 7.71% 7.52% 7.28% 7.10% 7.09% 7.25% 7.28% 7.33% 7.54% 7.79% 7.94% 7.85%
Core ROE 11.49% 9.75% 12.92% 12.00% 14.11% 14.47% 12.28% 10.70% 12.89% 13.21% 11.24% 10.80%
65

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Table 31: OCBC: Annual forecasts

S$ in mn 2011 2012 2013 2014 2015E 2016E 2017E
Interest Income 5,320 5,968 6,174 7,607 8,634 9,712 11,487
Net Fee income 1,137 1,198 1,355 1,495 1,704 1,892 2,119
Trading income 337 606 395 498 717 753 791
Other operating income 738 1,093 988 1,189 1,130 1,130 1,186
Total Revenues 5,622 6,645 6,621 7,918 8,718 9,394 10,566
Costs (2,430) (2,695) (2,784) (3,258) (3,734) (4,019) (4,381)
PPOP 3,192 3,950 3,837 4,660 4,983 5,375 6,185
Loan loss provisions (206) (263) (264) (359) (320) (448) (721)
Other provisions (76) (68) (60) (72) (100) (100) (100)
Other income 7 27 54 112 260 265 271
Pre-Tax 2,917 3,646 3,567 4,341 4,823 5,092 5,635
Tax (470) (551) (597) (687) (723) (789) (873)
Minorities and Hybrids (167) (207) (202) (234) (260) (274) (304)
Core Reported profit 2,280 2,887 2,768 3,420 3,839 4,028 4,457
Exceptional 32 1,106 - 422 - - -
Pref Dividends 90 110 82 57 57 57 57
Profits to Equity SHs 2,222 3,883 2,686 3,785 3,783 3,972 4,401
Table 32: OCBC: Annual Du-pont

S$ in mn 2011 2012 2013 2014 2015E 2016E 2017E
NIM (% of avg. IEA) 1.86% 1.77% 1.64% 1.68% 1.66% 1.73% 1.88%
IEA/Assets 72.16% 73.82% 74.85% 76.08% 76.35% 76.18% 76.18%
Margins (% of avg. Assets) 1.35% 1.31% 1.22% 1.28% 1.27% 1.32% 1.43%
Non-IR contribution 39.35% 43.60% 41.35% 40.19% 40.73% 40.18% 38.76%
Non-IR/Avg. Assets 0.87% 1.01% 0.86% 0.86% 0.87% 0.89% 0.91%
Revenue/Assets 2.22% 2.32% 2.09% 2.14% 2.14% 2.21% 2.34%
Cost/Income 43.22% 40.56% 42.05% 41.15% 42.84% 42.78% 41.46%
C/Assets 0.96% 0.94% 0.88% 0.88% 0.92% 0.94% 0.97%
Pre-Provision ROA 1.26% 1.38% 1.21% 1.26% 1.22% 1.26% 1.37%
LLP/Loans -0.17% -0.19% -0.17% -0.19% -0.15% -0.21% -0.31%
Loan/Assets 47.63% 48.65% 49.44% 51.30% 51.75% 51.12% 51.17%
Other Income/Assets -0.03% -0.01% 0.00% 0.01% 0.04% 0.04% 0.04%
Operating ROA 1.18% 1.29% 1.13% 1.16% 1.14% 1.16% 1.21%
Pre-Tax ROA 1.15% 1.27% 1.12% 1.17% 1.18% 1.20% 1.25%
Tax Rate -16.11% -15.12% -16.74% -15.83% -15.00% -15.50% -15.50%
Minorities & Outside Int. -0.07% -0.07% -0.06% -0.06% -0.06% -0.06% -0.07%
Preference Dividends -0.04% -0.04% -0.03% -0.02% -0.01% -0.01% -0.01%
Core ROA 0.86% 0.97% 0.85% 0.91% 0.93% 0.93% 0.97%
Core RoRWA 1.88% 2.15% 1.92% 1.99% 1.93% 1.89% 1.93%
Equity/Assets 7.80% 7.60% 7.35% 7.22% 7.57% 7.81% 7.93%
Core ROE 11.07% 12.74% 11.52% 12.59% 12.26% 11.96% 12.29%
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Table 33: OCBC: Common size statement
Common Size 2011 2012 2013 2014 2015 2016E 2017E

ASSETS
Loans 48.1% 48.1% 49.6% 51.7% 50.6% 50.4% 50.8%
Other IEA 30.1% 30.1% 30.9% 30.0% 30.8% 30.9% 30.7%
Other Non IEA 21.9% 21.8% 19.5% 18.3% 18.6% 18.7% 18.6%
Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
LIABILITIES
Deposits 55.6% 55.8% 57.9% 61.2% 61.2% 60.8% 60.8%
Other IBL 4.7% 3.9% 7.9% 7.2% 7.3% 7.6% 7.9%
Equity 9.1% 9.7% 8.3% 8.5% 8.8% 8.9% 8.9%
Table 34: OCBC: YoY growth
YoY Growth 2011 2012 2013 2014 2015 2016E 2017E

ASSETS
Loans 27.2% 6.6% 17.9% 23.6% 1.0% 5.1% 7.6%
Other IEA 25.5% 6.5% 17.7% 14.9% 6.0% 5.7% 6.1%
Other Non IEA 5.0% 6.5% 2.0% 11.4% 4.6% 6.2% 6.2%
Total Assets 21.1% 6.5% 14.4% 18.5% 3.2% 5.5% 6.9%
LIABILITIES
Deposits 25.3% 6.8% 18.7% 25.3% 3.3% 4.7% 6.9%
Other IBL 90.6% -12.5% 133.7% 8.1% 5.0% 10.0% 10.0%
Other Liabilities 12.3% 7.0% -3.3% 5.7% 1.1% 5.6% 5.6%
Equity 7.4% 13.0% -2.2% 21.7% 6.8% 6.6% 7.1%
Figure 131: OCBC: LDR
67

(65) 6882- 2450 20 August 2015
P&L Sensitivity
Figure 132: Impact of 5% change in revenue
Figure 133: Impact of 10bps change to NIM
Figure 134: Impact of 10bps change to credit costs
68

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Key Metrics

% %
% %

% %
69

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Valuation Charts

%


%
70

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OCBC Bank: Summary of Financials

Equity 3.5% 25.2% 7.8% 7.5% 8.0%
Fee Income 1,355 1,495 1,704 1,892 2,119 Non-Interest Income (5.5%) 16.2% 11.6% 6.3% 8.5%
Dealing Income 395 498 717 753 791 of which Fee Grth 13.1% 10.3% 14.0% 11.0% 12.0%
Revenues (0.4%) 19.6% 10.1% 7.8% 12.5%
Pre-Provision Profits (2.9%) 21.4% 6.9% 7.9% 15.1%
Operating costs (2,784) (3,258) (3,734) (4,019) (4,381) Loan Loss Provisions 0.4% 36.0% (10.7%) 39.8% 60.9%
Pre-Prov. Profits 3,837 4,660 4,983 5,375 6,185 Pre-Tax (24.9%) 33.5% 1.3% 5.6% 10.7%
Provisions (264) (359) (320) (448) (721) Attributable Income (30.8%) 40.9% (0.1%) 5.0% 10.8%
Other Inc 0 350 (100) (100) (100) EPS (32.9%) 35.1% (8.1%) 2.1% 7.6%
Other Exp. (60) 0 0 0 0 DPS 3.0% 5.9% 0.0% 2.8% 2.7%
Exceptionals - - -
DPS 0.34 0.36 0.36 0.37 0.38 NPLs/loans 0.8% 0.7% 0.7% 1.0% 1.1%
Book value 6.91 7.46 7.83 8.17 8.57 Growth in NPLs 11.3% 1.0% 39.5% 28.6% 16.0%
LLP/Loans (0.2%) (0.2%) (0.2%) (0.2%) (0.3%)
Long-term bond funding 26,702 28,859 30,302 33,332 36,665 Other Prov, Income/ Assets -0.00% 0.12% 0.04% 0.04% 0.04%
Other Borrowings 0 0 0 0 0 Operating ROA 1.1% 1.2% 1.1% 1.2% 1.2%
RWA 150,325 188,108 202,874 218,353 238,048 ROA 0.8% 1.0% 0.9% 0.9% 1.0%
Avg. RWA 139,986 169,217 195,491 210,614 228,201 RORWA 1.9% 2.2% 1.9% 1.9% 1.9%
Equity/Assets 7.3% 7.2% 7.6% 7.8% 7.9%
ROE 11.5% 14.2% 12.3% 12.0% 12.3%
71

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JPM Q-Profile
DBS Group Holdings Ltd (SINGAPORE / Financials)
As Of: 14-Aug-2015 Quant_Strategy@jpmorgan.com
Local Share Price Current: 18.64 12 Mth Forward EPS Current: 1.87
25.00 2.50
20.00 2.00
15.00 1.50
10.00 1.00
5.00 0.50
0.00
0.00
Jul/00
Apr/01
Jan/02
Oct/02
Jul/03
Apr/04
Jan/05
Oct/05
Jul/06
Apr/07
Jan/08
Oct/08
Jul/09
Apr/10
Jan/11
Oct/11
Jul/12
Apr/13
Jan/14
Oct/14
Jul/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
PE (1Yr Forward) Current: 10.0x P/E Relative to Singapore Index Current: 0.78
25.0x
1.40
1.20
20.0x
1.00
15.0x
0.80
0.60
10.0x
0.40
5.0x
0.20
0.0x 0.00
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Earnings Yield (& Local Bond Yield) Current: 10% Dividend Yield (Trailing) Current: 2.97
16% 10.0
12Mth fwd EY Singapore BY
Proxy 9.0
14%
8.0
12%
7.0
10% 6.0
8% 5.0
6% 4.0
3.0
4%
2.0
2%
1.0
0% 0.0
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
ROE (Trailing) Current: 11.23 Price/Book (Value) Current: 1.2x
14.00
2.5x P/B Trailing P/B Forward
12.00
2.0x
10.00
8.00 1.5x
6.00
1.0x
4.00
2.00 0.5x
0.00
0.0x
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Summary
DBS Group Holdings Ltd 33388.08 As Of: 14-Aug-15
SINGAPORE 54.94053 TICKER DBS SP Local Price: 18.64
Financials Banks EPS: 1.87
Latest Min Max Median Average 2 S.D.+ 2 S.D. - % to Min % to Max % to Med % to Avg
12mth Forward PE 9.96x 6.61 19.35 12.09 12.47 16.96 7.98 -34% 94% 21% 25%
P/BV (Trailing) 1.19 0.70 2.36 1.29 1.34 1.94 0.75 -42% 98% 8% 13%
Dividend Yield (Trailing) 2.97x 0.00 8.58 2.96 3.11 5.82 0.41 -100% 188% 0% 5%
ROE (Trailing) 11.23 5.30 13.00 10.97 10.11 14.87 5.36 -53% 16% -2% -10%
Source: Bloomberg, Reuters Global Fundamentals, IBES CONSENSUS, JPMorgan Quantitative & Derivative Strategy
72

(65) 6882- 2450 20 August 2015
JPM Q-Profile
United Overseas Bank Ltd. (Singapore) (SINGAPORE / Financials)
30.00 2.50
25.00 2.00
20.00
1.50
15.00
1.00
10.00
5.00 0.50
0.00
0.00
Jul/00
Apr/01
Jan/02
Oct/02
Jul/03
Apr/04
Jan/05
Oct/05
Jul/06
Apr/07
Jan/08
Oct/08
Jul/09
Apr/10
Jan/11
Oct/11
Jul/12
Apr/13
Jan/14
Oct/14
Jul/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
25.0x
1.40
1.20
20.0x
1.00
15.0x
0.80
0.60
10.0x
0.40
5.0x
0.20
0.0x 0.00
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
14% 7.0
Proxy
12% 6.0
10% 5.0
8% 4.0
6% 3.0
4% 2.0
2% 1.0
0% 0.0
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
18.00
16.00
14.00 2.5x
12.00
2.0x
10.00
8.00 1.5x
6.00
1.0x
4.00
2.00 0.5x
0.00
0.0x
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Summary
United Overseas Bank Ltd. (Singapore) 22850.40 As Of: 14-Aug-15
SINGAPORE 42.01059 TICKER UOB SP Local Price: 19.98
12mth Forward PE 9.55x 8.42 22.00 12.41 13.15 17.96 8.34 -12% 130% 30% 38%
P/BV (Trailing) 1.05 1.04 2.19 1.56 1.55 2.04 1.05 -1% 109% 49% 48%
Dividend Yield (Trailing) 3.83x 0.00 6.20 3.31 3.28 5.09 1.47 -100% 62% -14% -14%
ROE (Trailing) 10.97 7.58 16.88 11.67 11.62 15.60 7.64 -31% 54% 6% 6%
73

(65) 6882- 2450 20 August 2015
JPM Q-Profile
Oversea-Chinese Banking Corporation Limited (SINGAPORE / Financials)
12.00 1.20
10.00 1.00
8.00 0.80
6.00 0.60
4.00 0.40
2.00 0.20
0.00
0.00
Jul/00
Apr/01
Jan/02
Oct/02
Jul/03
Apr/04
Jan/05
Oct/05
Jul/06
Apr/07
Jan/08
Oct/08
Jul/09
Apr/10
Jan/11
Oct/11
Jul/12
Apr/13
Jan/14
Oct/14
Jul/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
25.0x
1.40
1.20
20.0x
1.00
15.0x
0.80
0.60
10.0x
0.40
5.0x
0.20
0.0x 0.00
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
14% 7.0
Proxy
12% 6.0
10% 5.0
8% 4.0
6% 3.0
4% 2.0
2% 1.0
0% 0.0
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
20.00
18.00
16.00
2.0x
14.00
12.00
1.5x
10.00
8.00
1.0x
6.00
4.00
0.5x
2.00
0.00
0.0x
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Jul/00
Mar/01
Nov/01
Jul/02
Mar/03
Nov/03
Jul/04
Mar/05
Nov/05
Jul/06
Mar/07
Nov/07
Jul/08
Mar/09
Nov/09
Jul/10
Mar/11
Nov/11
Jul/12
Mar/13
Nov/13
Jul/14
Mar/15
Summary
Oversea-Chinese Banking Corporation Limited
27437.25 As Of: 14-Aug-15
SINGAPORE 36.01186 TICKER OCBC SP Local Price: 9.50
12mth Forward PE 9.52x 8.01 20.22 13.66 13.98 18.74 9.21 -16% 112% 44% 47%
P/BV (Trailing) 1.17 0.90 2.09 1.50 1.52 1.99 1.05 -23% 79% 28% 30%
Dividend Yield (Trailing) 3.50x 1.01 6.25 3.19 3.06 5.19 0.92 -71% 79% -9% -13%
ROE (Trailing) 13.58 7.38 17.33 10.95 11.54 16.42 6.66 -46% 28% -19% -15%
74

(65) 6882- 2450 20 August 2015
Analyst Certification: The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research
analysts are primarily responsible for this report, the research analyst denoted by an “AC” on the cover or within the document
individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views
expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of
any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views
expressed by the research analyst(s) in this report. For all Korea-based research analysts listed on the front cover, they also certify, as per
KOFIA requirements, that their analysis was made in good faith and that the views reflect their own opinion, without undue influence or
intervention.
Important Disclosures
 Lead or Co-manager: J.P. Morgan acted as lead or co-manager in a public offering of equity and/or debt securities for OCBC Bank
within the past 12 months.
 Client: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients: DBS Group Holdings,
United Overseas Bank (UOB), OCBC Bank.
 Client/Investment Banking: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as investment
banking clients: DBS Group Holdings, United Overseas Bank (UOB), OCBC Bank.
 Client/Non-Investment Banking, Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following
company(ies) as clients, and the services provided were non-investment-banking, securities-related: DBS Group Holdings, United
Overseas Bank (UOB), OCBC Bank.
 Client/Non-Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients,
and the services provided were non-securities-related: DBS Group Holdings, United Overseas Bank (UOB), OCBC Bank.
 Investment Banking (past 12 months): J.P. Morgan received in the past 12 months compensation from investment banking DBS
Group Holdings, United Overseas Bank (UOB), OCBC Bank.
 Investment Banking (next 3 months): J.P. Morgan expects to receive, or intends to seek, compensation for investment banking
services in the next three months from DBS Group Holdings, United Overseas Bank (UOB), OCBC Bank.
 Non-Investment Banking Compensation: J.P. Morgan has received compensation in the past 12 months for products or services
other than investment banking from DBS Group Holdings, United Overseas Bank (UOB), OCBC Bank.
 “J.P. Morgan Securities LLC (“J.P. Morgan”) is acting as a Financial Advisor to Manulife Financial Corporation (“MFC”) on its 15-
year Pan-Asian life bancassurance partnership with DBS Bank as announced on 8 April 2015. J.P. Morgan will be receiving fees for so
acting. J.P. Morgan and its affiliates may perform, or may seek to perform, other financial or advisory services for MFC or its affiliates
and may have other interests in or relationships with MFC or its affiliates, and receive fees, commissions or other compensation in such
capacities. This research report and the information herein is not intended to serve as an endorsement of the proposed transaction or result
in procurement, withholding or revocation of a proxy or any other action by a security holder. This report is based solely on publicly
available information. No representation is made that it is accurate or complete.”
 As announced on 18 August 2015, Oversea-Chinese Banking Corporation Limited (“OCBC Bank”) has mandated J.P. Morgan
(S.E.A.) Limited (“J.P. Morgan”) to act as joint lead manager for its Basel III compliant Additional Tier 1 Non-Cumulative, Non-
Convertible Perpetual Capital Securities offering. J.P. Morgan will be receiving fees for so acting. J.P. Morgan and/or its affiliates may
perform, or may seek to perform, other financial or advisory services for OCBC Bank and/or its affiliates and may have other interests in
or relationships with OCBC Bank and/or its affiliates, and receive fees, commissions or other compensation in such capacities. This
research report and the information herein is not intended to serve as an endorsement of the proposed transaction or result in procurement,
withholding or revocation of a proxy or any other action by a security holder. This report is based solely on publicly available
information. No representation is made that it is accurate or complete.
Company-Specific Disclosures: Important disclosures, including price charts and credit opinion history tables, are available for
compendium reports and all J.P. Morgan–covered companies by visiting https://jpmm.com/research/disclosures, calling 1-800-477-0406,
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75

(65) 6882- 2450 20 August 2015
Date Rating Share Price Price Target

(S$) (S$)
06-Oct-06 OW 17.41 23.10
05-Jan-07 OW 19.39 24.80
16-Feb-07 OW 19.74 24.10
06-May-07 OW 20.26 25.30
DBS Group Holdings (DBSM.SI, DBS SP) Price Chart
27-Jul-07 OW 19.57 29.00
31-Aug-07 OW 17.24 25.00
36 OW S$24.1
OW S$25 OW S$11OW S$20 OW S$18.8 OW S$21.5 28-Oct-08 OW 8.79 20.00
22-Dec-08 OW 8.49 12.50
OW S$24.8
OW S$29 OW S$12.5
OW S$16.5 OW S$18 OW S$18.5
OW S$17.2
OW S$20 OW S$22
OW S$22 16-Feb-09 OW 8.20 11.00
27 29-May-09 OW 11.80 14.00
08-Aug-09 OW 12.84 16.50
OW S$23.1
OW S$25.3 OW S$20
OW S$14 OW S$19
OW S$24
OW S$20
OW S$17OW S$17.7
OW S$19.3 OW S$21
N S$20.5
Price(S$)
13-Nov-09 OW 14.14 20.00
18 09-May-10 OW 14.36 19.00
01-Aug-10 OW 14.40 18.00
19-Jan-11 OW 14.76 24.00
9 03-Sep-11 OW 13.10 20.00
11-Feb-12 OW 13.55 17.00
28-Apr-12 OW 13.72 18.50
0 08-Jan-13 OW 14.80 17.70
Oct Apr Oct Apr Oct Apr 06-Feb-13 OW 15.20 17.20
06 08 09 11 12 14
03-May-13 OW 16.76 18.80
Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends. 27-Jun-13 OW 15.50 19.30
Initiated coverage Oct 06, 2006.
02-Aug-13 OW 16.70 20.00
07-Nov-14 OW 19.19 21.00
05-Jan-15 OW 20.04 22.00
10-Mar-15 OW 19.67 21.50
12-Apr-15 N 20.40 20.50
09-Jun-15 OW 20.21 22.00

(S$) (S$)
13-Oct-06 OW 17.00 19.60
29-Nov-06 OW 18.60 20.00
United Overseas Bank (UOB) (UOBH.SI, UOB SP) Price Chart
05-Jan-07 N 19.50 20.40
45 01-Sep-07 N 20.70 22.20
N S$20.4 N S$15
OW S$19 N S$21 UW S$18.4
N S$21.1 29-Apr-08 N 20.50 23.00
08-Aug-08 OW 19.66 23.00
36
OW S$20 OW S$20
OW S$17 N S$19.8
N S$17.4 N S$20
UW S$20.3 UW S$22UW S$22.5 28-Oct-08 OW 12.74 20.00
30-Dec-08 N 12.64 15.00
27OW S$19.6
N S$22.2N OW
S$23S$23
N S$13OW S$26OW S$22
N S$19.8
N S$18
N S$18.1
N S$19.5
UW S$18.1
N S$23 N S$25
UW S$21.5 01-Mar-09 N 9.99 13.00
Price(S$)
07-May-09 OW 14.88 17.00
06-Aug-09 OW 16.62 19.00
18 13-Nov-09 OW 18.96 26.00
25-Aug-10 OW 18.42 22.00
25-Mar-11 N 18.58 19.80
9
20-Jun-11 N 18.90 19.80
06-Jul-11 N 19.48 21.00
0 03-Sep-11 N 18.11 18.00
Sep Mar Sep Mar Sep Mar Sep 07-Nov-11 N 16.43 17.40
06 08 09 11 12 14 15
24-Feb-12 N 18.40 18.10
Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends. 21-Sep-12 N 19.61 19.50
Initiated coverage Oct 13, 2006.
08-Nov-12 N 18.30 20.00
08-Jan-13 UW 19.64 18.40
14-Mar-13 UW 19.63 18.10
03-May-13 UW 21.35 20.30
76

(65) 6882- 2450 20 August 2015
27-Jun-13 N 19.55 21.10

02-Aug-13 N 21.46 23.00
17-Jul-14 N 23.84 25.00
01-Aug-14 UW 24.16 22.00
10-Mar-15 UW 23.00 21.50
09-Jun-15 UW 22.79 22.50

(S$) (S$)
OCBC Bank (OCBC.SI, OCBC SP) Price Chart
05-Jan-07 OW 7.65 9.00
23-Feb-07 OW 8.80 9.50
OW S$10.35 N S$6 10-Apr-07 OW 9.70 10.35
31-Aug-07 N 8.55 8.90
18
22-Feb-08 N 7.68 9.30
OW S$9.5 N S$6.5 N S$8.5 NR NR
08-Aug-08 N 8.16 8.00
28-Oct-08 N 5.11 6.50
12 OW S$9N S$8.9
N S$9.3
N S$8 N S$5
N S$6.5
OW S$11 N S$8.3N S$9.4UW S$9
UW S$9.5
UW S$9.3 OW S$12 02-Jan-09 N 4.99 6.00
Price(S$)
17-Mar-09 N 4.52 5.00
17-Jul-09 N 7.03 6.50
04-Aug-09 N 7.80 8.50
6
13-Nov-09 OW 8.16 11.00
03-Sep-11 N 8.72 8.30
11-May-12 N 8.94 9.40
0 08-Jan-13 UW 9.68 9.00
Oct Apr Oct Apr Oct Apr 30-Jan-13 NR 9.87 --
06 08 09 11 12 14
27-Jun-13 UW 9.97 9.50
Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends. 04-Jan-14 UW 10.02 9.30
Break in coverage Jan 30, 2013 - Jun 27, 2013.
06-Jan-14 NR 10.02 --
11-Dec-14 OW 10.43 12.00
The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire
period.
J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated
Explanation of Equity Research Ratings, Designations and Analyst(s) Coverage Universe:
J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if
applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy
reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a
recommendation or a rating. In our Asia (ex-Australia) and U.K. small- and mid-cap equity research, each stock’s expected total return is
compared to the expected total return of a benchmark country market index, not to those analysts’ coverage universe. If it does not appear
in the Important Disclosures section of this report, the certifying analyst’s coverage universe can be found on J.P. Morgan’s research
website, www.jpmorganmarkets.com.
Coverage Universe: Modi, Harsh Wardhan: AMMB Holdings (AMMB.KL), Banco de Oro (BDO.PS), Bank Central Asia (BCA)
(BBCA.JK), Bank Danamon (BDMN.JK), Bank Negara Indonesia Persero (BBNI.JK), Bank Rakyat Indonesia (BBRI.JK), Bank of the
Philippine Islands (BPI) (BPI.PS), CIMB Group Holdings (CIMB.KL), DBS Group Holdings (DBSM.SI), East West Banking
Corporation (EW.PS), Hong Kong Exchanges & Clearing (0388.HK), Hong Leong Bank (HLBB.KL), Maybank (Malayan Banking)
(MBBM.KL), Metropolitan Bank (MBT.PS), OCBC Bank (OCBC.SI), PT Bank Mandiri Tbk. (BMRI.JK), Philippine National Bank
(PNB.PS), Public Bank (PUBM.KL), RHB Capital (RHBC.KL), Security Bank Corporation (SECB.PS), Singapore Exchange (SGXL.SI),
United Overseas Bank (UOB) (UOBH.SI)
77

(65) 6882- 2450 20 August 2015
J.P. Morgan Equity Research Ratings Distribution, as of June 30, 2015

Overweight Neutral Underweight
(buy) (hold) (sell)
J.P. Morgan Global Equity Research Coverage 44% 43% 13%
IB clients* 51% 48% 38%
JPMS Equity Research Coverage 45% 47% 9%
IB clients* 71% 66% 57%
*Percentage of investment banking clients in each rating category.
For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold
rating category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table
above.
Equity Valuation and Risks: For valuation methodology and risks associated with covered companies or price targets for covered
companies, please see the most recent company-specific research report at http://www.jpmorganmarkets.com, contact the primary analyst
or your J.P. Morgan representative, or email research.disclosure.inquiries@jpmorgan.com.
Equity Analysts' Compensation: The equity research analysts responsible for the preparation of this report receive compensation based
upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues.
Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-US
affiliates of JPMS, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMS,
and may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public
appearances, and trading securities held by a research analyst account.
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Asia Pacific Equity Research

 China trade finance: This is more of a volume, rather than asset

Harsh Wardhan Modi Asia Pacific Equity Research

Table 1: Singapore banks valuation table

Harsh Wardhan Modi Asia Pacific Equity Research

Figure 1: General Commerce Loan Growth

Figure 2: System NPL Ratio (%)

Harsh Wardhan Modi Asia Pacific Equity Research

Declining Trade Loans

Figure 3: System Loan Growth

Figure 4: DBS: General Commerce Loan Growth Trend

Source: Company Reports and J.P. Morgan estimates.

Harsh Wardhan Modi Asia Pacific Equity Research

Figure 5: UOB: General Commerce Loan Growth Trend

Source: Company Reports and J.P. Morgan estimates.

Figure 6: OCBC: General Commerce Loan Growth Trend

Source: Company Reports and J.P. Morgan estimates.

Harsh Wardhan Modi Asia Pacific Equity Research

Figure 7: 3M Swap Offer Rate (SORF3M Index) in last one year

Figure 8: 3M Singapore Inter-Bank Rate (SIBF3M Index) in last one year

Harsh Wardhan Modi Asia Pacific Equity Research

Figure 9: S$ LDR by Banks

With low S$ CASA and high S$

Source: Company Reports.

Figure 10: Impact of 100 bps rise in Sibor on NIM

Source: Company Reports and J.P. Morgan estimates.

Harsh Wardhan Modi Asia Pacific Equity Research

Table 2: Impact of 100 bps rise in Sibor on NIM

% linked to variable rates 80% 80% 80%

Loan book linked to Sibor 45,161 15,269 43,046

Total deposits 305,913 246,424 241,485

Total CASA deposits 184,502 113,402 100,735

S$ CASA deposits 127,086 69,060 63,080

LDR 92.7% 85.3% 83.8%

Incremental Interest income

Incremental Interest expense

Increase in NII 340 141 69

NIM LTM 1.64% 1.58% 1.60%

New NII 7,049 5,195 4,807

Harsh Wardhan Modi Asia Pacific Equity Research

Figure 11: Singapore: 3M Sibor and debt servicing costs

We expect debt servicing as a

Figure 12: System Special Mention Loans (%)

Harsh Wardhan Modi Asia Pacific Equity Research

Figure 13: NPL Ratios by Bank

NPL ratio is stable across the

Source: Company reports.

Figure 14: NPL Coverage by Bank

Source: Company reports.

Figure 15: Excess Provisions (% Loans)

Average excess provisions for

Source: Company reports.

Harsh Wardhan Modi Asia Pacific Equity Research

Figure 16: Sector Wise NPL Trend

Source: Company reports.

Figure 17: Singapore: Property Price Index

Figure 18: Brent Crude Prices (USD)

Harsh Wardhan Modi Asia Pacific Equity Research

Figure 19: Crude Palm Oil Prices (USD)

Figure 20: CRB Commodity Index (USD)

Figure 21: Bloomberg-JP Morgan Asia Dollar Index

Harsh Wardhan Modi Asia Pacific Equity Research

Investment Thesis, Valuation and Risks