- FY20 earnings of S$3.69bn beat our expectation by 27% on lower-than-expected credit costs and higher non-interest income.
- GP fell to S$48mn for a 7bp credit cost, signalling the end of the crisis.
- Strong CET-1 of 15.2% to support pre-COVID DPS of S$0.56 p.a. once restrictions are lifted.
- Upgrade to BUY from NEUTRAL with higher GGM TP of S$13.65, up from S$9.68. FY21e earnings raised by 19% for higher insurance and wealth-management income and lower allowances. Cost of equity in GGM lowered to 7.9% from 9.2% on better risk-to-reward. We peg our TP at 1.19x P/BV and 9.0% FY21e ROE to reflect a better credit outlook.