DBS gets an upgrade as negatives largely priced in

SINGAPORE (Nov 2): Maybank Kim Eng is upgrading DBS Group Holdings to “hold” with higher target price of $14.55 after raising FY16-18 estimated earnings by 1% each to reflect higher non-interest income and lower costs but offset by higher provisions.

The acquisition of ANZ's wealth management and retail business is also not expected to have a material impact on capital, adds Maybank.

In a Tuesday report, analyst Ng Li Hiang says DBS’ nine-month core PATMI of $3.3 billion beat Maybank’s forecast but provisions were higher than expected. Third quarter PATMI was also flat y-o-y from flat growth in net interest income due to lower SGD interest rates and higher liquidity buffers and higher provisions.

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