SELL maintained. Undoubtedly a strong set of 1Q results from DBS, which surprised on the upside against our estimates and consensus. However, with the variance coming from the more volatile treasury operations and low loan loss provisions, which we see rising in the coming quarters, we raise our forecasts by a marginal 5%. Our TP is raised to SGD12.10 on a higher P/BV of 0.97x (from 0.9x) for a higher 2012 ROE of 10.8% (from 10.5%). Earnings risks persist for the three banks, and DBS is the most susceptible to external volatility, particularly since treasury income now makes up 31% of operating income, while uncertainties related to the Bank Danamon acquisition could be a drag.

Click here for full report

Source: Maybank-Kim Eng Research - 30 April 2012