SINGAPORE – Shares of DBS, UOB and OCBC hit record highs on Nov 8, after the three local banks separately discussed options to manage excess capital, including share buybacks and increased dividend payouts.
UOB gained the most, rising 7.2 per cent to close at $35.69, after chief executive officer Wee Ee Cheong said at the bank’s results briefing on Nov 8 that it is open to considering a share buyback, among other options, to manage excess capital.
UOB has excess capital of about $2 billion to $2.5 billion.
This came after DBS announced at its Nov 7 briefing that it will buy back $3 billion worth of shares in the open market and cancel them in the next few years, in a bid to lower excess capital and raise earnings per share.
DBS rose 1.7 per cent to close at $42.40 on Nov 8.
OCBC bucked the trend, with CEO Helen Wong noting that the bank prefers to give dividends over share buybacks to return excess capital to shareholders.
OCBC finished trading 1.1 per cent higher at $16.06.
The three banks on Nov 7 and 8 announced another quarter of strong profits, buoyed by higher fee income from wealth management and trading, even as interest income softened amid an outlook of volatile rates.
DBS’ third-quarter net profit rose 17 per cent to $3.03 billion, from $2.59 billion the year before, while UOB’s net profit for the period jumped 16 per cent to a record $1.61 billion from $1.38 billion a year earlier. OCBC’s net profit for the third quarter rose 9 per cent to $1.97 billion, from $1.81 billion in the previous corresponding period.
DBS declared an interim dividend of 54 cents per share for the quarter, unchanged from the previous quarter.