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DBS, UOB or OCBC – Which Has The Best Financial Track Record? Round 2

In Singapore, the three major listed banks are DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corporation Limited (SGX: O39) and United Overseas Bank Ltd (SGX: U11). After peaking in April 2018, these banks have seen their stocks price declining for the next few months, down by more than 20% from their respective peaks.

The decline in the banks’ stocks price might draw some interest from investors. One of this group of investors is the Singapore dividend investors. In particular, Singaporean dividend investors might want to know which bank might be a better Singapore dividend stock.

Clearly, there is no easy answer to the above question. After all, we do not know what will happen in the future. Still, we would like put the trio side by side for a direct comparison.

In our previous article, we looked at the dividend track record of the banks. DBS was the winner in that comparison. In this article, we will compare the financial track record of these companies for the last 10 years. Here, the idea is simple. A company that has a proven track record of stability and growth might sustain such performance in the future, which in turn, will allow it to sustain or grow its dividend payments.

The showdown

Let’s begin with DBS Group.

From 2008 to 2017, DBS’s total income grew from S$ 6.0 billion in 2008 to S$11.9 billion in 2017. Similarly, net profit grew from S$ 1.9 billion in 2008 to S$ 4.4 billion in 2017. The former was up by 98% while the latter was up by 132% during that period.

Next we have OCBC.

During that period, OCBC’s total income grew from S$ 4.4 billion in 2008 to S$9.6 billion in 2017. Similarly, net profit attributable to shareholders grew from S$1.7 billion in 2008 to S$4.1 billion in 2017. The former was up by 118% while the latter was up by 141% during that period.

Lastly, we will look at UOB’s performance.

In the last decade, total income grew from S$ 5.3 billion in 2008 to S$8.9 billion in 2017. Similarly, net profit attributable to shareholders grew from S$1.9 billion in 2008 to S$3.4 billion in 2017. The former was up by 68% while the latter was up by 79% during that period.

Conclusion

In sum, all three banks delivered stable growth in the last five years. Among the three, however, OCBC did the best with the highest growth rates in total income and net profit in the last decade.

With that, let’s move on to the last round of our comparison, the stock valuation.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool has recommendations for DBS Group Holdings Ltd, Oversea-Chinese Banking Corporation Limited and United Overseas Bank Ltd.