Singapore banks up on record earnings; index rallies from 2-week lows

Singapore bank shares surged on Wednesday after two top lenders reported record profit for the first quarter, propping up the main index from 2-week lows. -- FILE PHOTO: BLOOMBERG
Singapore bank shares surged on Wednesday after two top lenders reported record profit for the first quarter, propping up the main index from 2-week lows. -- FILE PHOTO: BLOOMBERG

SINGAPORE (Reuters) - Singapore bank shares surged on Wednesday after two top lenders reported record profit for the first quarter, propping up the main index from 2-week lows.

DBS Group Holdings shares jumped as much as 2.8 per cent to $17.31, their highest in more than 3 months, while OCBC shares gained 3.2 per cent to a 3-week high of $9.77. The gains pushed the Singapore index up 0.77 per cent from the 2-week low it hit on Tuesday.

The two banks posted record quarterly profit that beat market estimates, powered by a double-digit growth in loans and improving interest rate margins.

UOB shares rallied from 5-week lows, leaping 3.4 per cent to $21.89, though its first-quarter results are not due until after the market closes.

CIMB maintained its "add" rating on DBS and left its target price of $20.28 unchanged, saying in a research note it believed banks would be an outperforming asset class in Singapore this year.

The brokerage also kept its "hold" rating on OCBC with a target price of $10.08.

Among other stocks, shares of Yangzijiang Shipbuilding Holdings advanced 1.8 per cent after the Chinese company said its net profit rose 11 per cent from a year earlier, as profit growth from its investment business compensated for the slide in shipbuilding earnings.