Check out Singapore banks' 'flight-to-safety' theme compared with ASEAN counterparts

NIM has reached an inflection point.

DBS Vickers is raising Singapore banks to overweight, both within the Singapore context and among ASEAN banks coverage.

Here's more from DBS Vickers:

Besides improved prospects in 2014 coupled with possible interest rate hikes, we believe Singapore banks provide a flight-to-safety theme in the near term, especially when compared with its ASEAN counterparts.

We have imputed NIM recovery and stronger earnings growth for 2014. 2013 earnings will be subdued on flat NIM and normalised provisions.

NIM has reached an inflection point; potential recovery in 2014. NIM has finally started to stabilise, as evidenced in the recent set of 2Q13 results. NIM pressure appears to be well combated. Banks have started to price up loans.

As such, banks with higher CASA composition as well as better S$ liquidity should be well positioned. We believe OCBC is in a better position (vs UOB) given that its S$ loan-to-deposit ratio is 84% (UOB: 95%) while its CASA to total deposits stands at 50% (UOB: 42%).