We are in the middle of the earnings season right now, with a good number of Singapore-listed companies having already reported their business updates or full financial results for the quarter ended 30 June.

Among them include the 3 Singapore banks (in DBS, UOB, and OCBC), and you can find my detailed review of their results in this post – How DBS, UOB, and OCBC Fared in Q2 and 1H FY2024.

Just like in the previous quarters, after the 3 Singapore-listed banks have released their business updates/financial results, I will do a comparison to find out which one came out on top.

In this post, you will find a side-by-side comparison of DBS (SGX: D05), UOB (SGX: U11), and OCBC’s (SGX: O39) latest results for the 2nd quarter and 1st half of the FY2024 ended 30 June in terms of their financial performance (reported for the 2nd quarter as well as for the 1st half of FY2024), key financial ratios (reported for the 2nd quarter compared against that reported in the 1st quarter 3 months ago), as well as its dividend payouts (for the 1st half of FY2024 compared against that paid out last year) to find out which bank came out on top this time round.

Additionally, I will also be putting the 3 banks’ valuations together to find out which one is currently the ‘cheapest’, and the ‘most expensive’.

Let’s begin:

Financial Performance (Q2 FY2023 vs. Q2 FY2024)

In this section, let us compare the 3 banks’ financial performance (I will be looking at their net interest income, net fee and commission income, other non-interest income, and net profit attributable to shareholders) recorded for the 2nd quarter:

Net Interest Income:

	DBS	UOB	OCBC
Net Interest Income	Up +5.0% Q2 FY2023: S$3,433m Q2 FY2024: S$3,594m	Down -1.5% Q2 FY2023: S$2,437m Q2 FY2024: S$2,401m	Up +1.7% Q2 FY2023: S$2,389m Q2 FY2024: S$2,430m

Both DBS and OCBC experienced increases in their net interest income during the 2nd quarter. However, DBS outperformed with a 5% growth in net interest income (driven by an increase in its commercial book net interest income, as well as in its loans and deposits in constant currency terms), while OCBC saw a 1.7% increase.

Net Fee & Commission Income:

	DBS	UOB	OCBC
Net Fee & Commission Income	Up +27.3% Q2 FY2023: S823m Q2 FY2024: S$1,048m	Up +17.9% Q2 FY2023: S$524m Q2 FY2024: S$618m	Up +8.4% Q2 FY2023: S$430m Q2 FY2024: S$466m

All 3 banks saw an increase in its net fee & commission income for the 2nd quarter. However, DBS recorded the strongest improvement, at 27.3%, driven by wealth management and card fees.

Other Non-Interest Income:

	DBS	UOB	OCBC
Other Non- Interest Income	Up +6.5% Q2 FY2023: S789m Q2 FY2024: S$840m	Down -21.3% Q2 FY2023: S$581m Q2 FY2024: S$457m	Up +15.3% Q2 FY2023: S$636m Q2 FY2024: S$733m

Similar to its net interest income, UOB was the only bank that saw a decline in its other non-interest income in the 2nd quarter.

However, among DBS and OCBC, the latter recorded a stronger growth, by 15.3%, which can be attributed to improvements in its trading and insurance income.

Net Profit Attributable to Shareholders:

	DBS	UOB	OCBC
Net Profit Attributable to Shareholders	Up +6.1% Q2 FY2023: S2,629m Q2 FY2024: S$2,789m	Up +0.7% Q2 FY2023: S$1,415m Q2 FY2024: S$1,425m	Up +13.7% Q2 FY2023: S$1,710m Q2 FY2024: S$1,944m

While all 3 banks saw an improvement in its net profit attributable to shareholders in the 2nd quarter, but OCBC is the only one that manage to record a double-digit percentage improvement (to 13.7%), which can be attributed to a higher total income growth, along with lower allowances, as well as amortisation, tax, and non-controlling interest.

Financial Performance (1H FY2023 vs. 1H FY2024)

In this section, you will find a comparison of the 3 banks’ financial performance (i.e., their net interest income, net fee and commission income, other non-interest income, and net profit attributable to shareholders) recorded for the 1st half of FY2024:

Net Interest Income:

	DBS	UOB	OCBC
Net Interest Income	Up +5.9% 1H FY2023: S$6,704m 1H FY2024: S$7,099m	Down -1.7% 1H FY2023: S$4,846m 1H FY2024: S$4,763m	Up +3.0% 1H FY2023: S$4,727m 1H FY2024: S$4,867m

Similar to the 2nd quarter, UOB was the only bank that saw a decline in its net interest income for the 1st half of FY2024, compared that recorded against a year ago.

Between DBS and OCBC, the former had a better improvement, at 5.9%, contributed by an increase in its commercial book net interest income, as well as loans in constant-currency terms, compared to OCBC, at 3.0%.

Net Fee & Commission Income:

	DBS	UOB	OCBC
Net Fee & Commission Income	Up +24.9% 1H FY2023: S$1,674m 1H FY2024: S$2,091m	Up +11.4% 1H FY2023: S$1,075m 1H FY2024: S$1,198m	Up +7.0% 1H FY2023: S$883m 1H FY2024: S$945m

All 3 banks experienced an increase in net fee and commission income for the 1st half of FY2024, but DBS led the way with the most significant improvement at 24.9%, driven by double-digit growth in wealth management fees, card fees, and loan-related fees.

Other Non-Interest Income:

	DBS	UOB	OCBC
Other Non- Interest Income	Up +15.3% 1H FY2023: S$1,603m 1H FY2024: S$1,849m	Down -9.3% 1H FY2023: S$1,144m 1H FY2024: S$1,038m	Up +20.8% 1H FY2023: S$1,195m 1H FY2024: S$1,443m

Except for UOB, which experienced a decline in its other non-interest income, the other two banks, DBS and OCBC, posted relatively strong growth in this area, with double-digit percentage increases.

Notably, OCBC led the way with a 20.8% increase, driven by higher net trading income and insurance income, surpassing DBS’ 15.3% growth.

Net Profit Attributable to Shareholders:

	DBS	UOB	OCBC
Net Profit Attributable to Shareholders	Up +10.4% 1H FY2023: S$5,200m 1H FY2024: S$5,740m	Down -0.4% 1H FY2023: S$2,925m 1H FY2024: S$2,912m	Up +9.4% 1H FY2023: S$3,589m 1H FY2024: S$3,926m

It was a tight competition between DBS and OCBC, but DBS narrowly led by 1.0 percentage point, achieving 10.4% compared to OCBC’s 9.4% improvement.

Key Financial Ratios (Q1 FY2024 vs. Q2 FY2024)

Next, let’s compare the three key financial ratios I always examine when reviewing a bank’s performance – its net interest margin, return on equity, as well as its non-performing loans ratio – recorded for the current quarter under review (Q2 FY2024 ended 30 June) against the previous quarter (Q1 FY2024 ended 31 March) to find out which bank showed the most significant improvement:

Net Interest Margin:

	DBS	UOB	OCBC
Net Interest Margin	No Change Q1 FY2024: 2.14% Q2 FY2024: 2.14%	Up +0.03pp Q1 FY2024: 2.02% Q2 FY2024: 2.05%	Down -0.07pp Q1 FY2024: 2.27% Q2 FY2024: 2.20%

UOB stands out as the ‘clear winner’ since it is the only bank that experienced growth in its net interest margin.

Although OCBC’s net interest margin decreased by 0.07pp compared to the 1st quarter, it still maintains the highest net interest margin among the three banks at 2.20%.

Return on Equity:

	DBS	UOB	OCBC
Return on Equity	Down -1.2pp Q1 FY2024: 19.4% Q2 FY2024: 18.2%	Down -0.6pp Q1 FY2024: 14.0% Q2 FY2024: 13.4%	Down -0.5pp Q1 FY2024: 14.7% Q2 FY2024: 14.2%

All three banks experienced a decline in their return on equity compared to the previous quarter. However, OCBC’s decrease was the most modest at just 0.05pp, while UOB and DBS saw declines of 0.06pp and 1.2pp, respectively.

Despite this, DBS maintained the highest return on equity among the three banks, standing at 18.2%.

Non-Performing Loans Ratio:

	DBS	UOB	OCBC
Return on Equity	No Change Q1 FY2024: 1.1% Q2 FY2024: 1.1%	No Change Q1 FY2024: 1.5% Q2 FY2024: 1.5%	Down -0.1pp Q1 FY2024: 1.0% Q2 FY2024: 0.9%

OCBC not only continued to reduce its non-performing loans ratio but also achieved the lowest ratio among its peers, at just 0.9%.

Dividend Payout to Shareholders (1H FY2023 vs. 1H FY2024)

DBS is the only one that pays out a dividend to the shareholders on a quarterly basis, while UOB and OCBC pays out a dividend to the shareholders on a half-yearly basis.

The table below are the 3 banks’ dividend payout for the 1st half of FY2024, compared against their dividend payouts last year:

	DBS	UOB	OCBC
Dividend Payout to Shareholders	Up +20.0% 1H FY2023: S$0.90/share 1H FY2024: S$1.08/share	Up +3.5% 1H FY2023: S$0.85/share 1H FY2024: S$0.88/share	Up +10.0% 1H FY2023: S$0.40/share 1H FY2024: S$0.44/share

While all 3 banks saw a bump in their dividend payouts for the 1st half of FY2024, DBS’s dividend payout grew the most, by 20%, followed by OCBC (by 10.0%), and then UOB (by 3.5%).

Which of the 3 Singapore Banks Had the Strongest Set of Results?

It’s a close competition between DBS and OCBC, but I would say say DBS edged out slightly this time round.

DBS saw the strongest growth in net interest income and net fee and commission income for both the 2nd quarter and the 1st half of FY2024. Additionally, it reported the highest increase in net profit attributable to shareholders for the 1st half of FY2024 and achieved the highest return on equity in the second quarter. Moreover, DBS recorded the largest percentage increase in dividends and stands out as the only bank that pays dividends to shareholders on a quarterly basis.

On the other hand, OCBC posted the highest growth in other non-interest income for both the 2nd quarter and the 1st half of FY2024. It also achieved the highest improvement in net profit attributable to shareholders for the second quarter, the highest net interest margin, and the lowest non-performing loans ratio.

Which of the 3 Singapore-Listed Banks is the ‘Cheapest’ and ‘Most Expensive’?

The following table is a comparison of the current valuations of DBS, UOB, and OCBC based on their traded price at the time of writing (on Monday, 12 August):

	DBS	UOB	OCBC
Share Price	S$34.08	S$29.31	S$13.79
P/E Ratio	8.68	9.01	8.73
P/B Ratio	1.46	1.06	1.12
Dividend Yield##	5.63%	5.80%	5.95%

DBS is once again seen as the ‘most expensive’, given its highest P/B ratio and lowest dividend yield among the three banks.

This time, there isn't a clear ‘cheapest’ bank, as DBS had the lowest P/E ratio, UOB had the lowest P/B ratio, and OCBC offered the highest dividend yield.

Closing Thoughts

While UOB’s results continue to be the weakest this time around, a few quarters of slightly slower growth will not make or break the bank. In my view, the bank's business fundamentals remain strong.

Regarding DBS, aside from its impressive growth, the upcoming leadership change after its AGM next March is noteworthy. With current CEO Piyush Gupta retiring, Tan Su Shan will take the helm. I had anticipated this appointment, as she has excelled in various business segments over the years. I am confident in Su Shan’s leadership abilities to elevate the bank further.

This concludes my comparison of the 2nd quarter and 1st half FY2024 results for the 3 Singapore-listed banks. Please remember that all opinions shared here are for educational purposes only and are not intended as buy or sell recommendations. You should always conduct your own research before making any investment decisions.

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

The post DBS vs. UOB vs. OCBC: Who Came Out on Top in its Q2 and 1H FY2024 Results? first appeared on The Singaporean Investor.