Since my last update, Singapore’s DBS Group (OTCPK:DBSDF) (OTCPK:DBSDY) has continued to perform fairly well, outperforming other Singapore banks like United Overseas Bank (UOVERY) and OCBC (OTCPK:OVCHF), as well as Standard Chartered (OTCPK:SCBFY) and the Asian banks in general, with a total return of around 17% for shareholders. Outperformance has been driven largely by much lower than expected credit costs, but fee income, expenses, and loan growth have been trending more positively than expected as well.
I continue to like DBS Group’s growth opportunities over the next decade. Management has been increasing its exposure to growth opportunities in India and China, as well as Southeast Asian markets like Indonesia, and I believe there’s a long runway for the company’s “phygital” strategy of building a strong digital bank complemented with a local physical presence. Long-term core earnings growth of 5% to 6% can drive total long-term annualized returns in the double-digits from here, making this still a bank well worth considering.
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