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CROWD PLEASING. Investors have gotten positively giddy listening to Asia-focused bank chiefs this week. On Friday $57 billion DBS (DBSM.SI), Singapore’s largest lender, reported record quarterly profit of S$2 billion ($1.1 billion) as fee income rose and net interest margins held steady from the previous three months. Bad loan ratios returned to pre-crisis levels too. That followed an upbeat outlook from Standard Chartered (STAN.L), (2888.HK) and even cautious optimism from HSBC (HSBA.L), (0005.HK).
DBS shares rose 2% on Friday for a 4% gain on the week, while the two Hong Kong-focused lenders have added 9% each since Monday. The disparity is partly because much of the lender’s strength is already priced in: its shares trade on 1.3 times forecast book value, far above HSBC at 0.7 times, and StanChart at 0.5. With a return on equity of 15.4%, per Citi calculations, the primary question for investors is how much further DBS might go. (By Jennifer Hughes)
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