OREANDA-NEWS. April 30, 2015. The Straits Times Index (STI) is currently trading around 3,500. This is approximately 135 points higher than its close at the end of 2014 and double the levels of April 2009 when the initial recovery from the global financial crisis began.

The banking sector was one of the key segments that recently boosted the STI to the 3,500 level, as DBS Group Holdings (DBS),  Oversea-Chinese Banking Corporation and United Overseas Bank (UOB) account for almost one-third of the STI’s weighting. Together, the three banks have averaged a total return of 5.1%  in the month-to-date, after a 2% decline in the first quarter of 2015. This has brought the average 12-month total return to above 20%.

This week marks two important events for the banks – earnings and dividends.

Yesterday, DBS Group Holdings posted 1Q15 net income of S\\$1.27 billion, which beat Bloomberg estimates of S\\$1.05 billion. Net interest margin was 1.69% versus 1.66% in the same quarter last year. Both OCBC and UOB are expected to report before the market open on Thursday around 7am.

Also, the bank stocks are goIng ex-dividend this week after their final payouts for the 2014 year. Yesterday, shares in DBS went ex-dividend at 30 cents per share. Tomorrow, UOB will go ex-dividend with 55 cents per share in dividends and on Thursday, OCBC shares will go ex-dividend with an 18 cent per share payment.

The recent performance of the three banks is detailed in the table below.

Company Name SGX Code Mkt Cap S\\$M STI Weight % Price Change MTD % Change - Div. Adj. MTD % Change - Div. Adj. YTD

% Change - Div. Adj.

[1 Year]

 Ex-Div. Date Div. Amt. S\\$
United Overseas Bank U11 39,574 9.9 8.9 8.9 2.1 13.1 29/04/2015 0.550
DBS Group Holdings D05 52,253 12.2 2.6 4.1 2.9 29.0 27/04/2015 0.300
Oversea-Chinese Banking Corporation O39 42,962 11.0 2.4 2.4 3.4 19.5 30/04/2015 0.180
Average       4.6 5.1 2.8 20.5    

Source: SGX StockFacts (Data as of 27 April 2015)

As noted in the SGX My Gateway report yesterday (click here), the three banks are scored according to the Governance and Transparency Index (GTI) in SGX StockFacts. The GTI was jointly launched by The Business Times (BT) and the Centre for Governance, Institutions and Organizations (CGIO) of NUS Business School, National University of Singapore.

Next week will mark three years since the Code of Corporate Governance 2012 was introduced. The Code provides principles and guidelines to listed companies and their Boards to spur them towards a high standard of corporate governance. The Code provides guiding principles on board matters, remuneration matters, accountability and audit, in addition to shareholder rights and responsibilities.

Like the Code, the GTI also ranks companies on how they adhere to these principles and guidelines. According to a presentation by Centre for Governance, Institutions and Organisations,  the average overall GTI score of listed companies in Singapore is at an all-time high of 42.1 over six years. The 24 companies within the STI that are scored by the GTI maintain an average score of 80.0. The table below details the scores of the three banks, which currently average 93.

Company Name SGX Code GTI Score* GTI Rank* Rank Change
DBS Group Holdings D05 103 8 -1
Oversea-Chinese Banking Corporation O39 100 9 +12
United Overseas Bank U11 75 28 +13

Source: SGX StockFacts 
*GTI Year: 2014