At the end of 2025, the giants of the Singaporean banking world—DBS, OCBC, and UOB—are standing sturdy, having relied on robust inflows of wealth and disciplined cost management to navigate a terrain blighted by rate cuts and geopolitical shifts.
In the perspective of investors, 2026 weighs with cautious optimism. For most of the banking pad, the moderate-growth expectation is based primarily on a strong stream of dividends and non-interest income. The acceleration of global rates also provides moderate NIM pressure to contend with.
Sector Outlook Resilience And Inflows Drive Momentum
Singapore banks have a strong head start entering 2026. An increasingly strong inflow of funds (and the Securities Market Development Program’s second deployment) established this sector as the regional safe haven.
Wealth management is the key growth engine at 62 percent growth in 2025 with DBS and OCBC posting an 18 percent increase year-on-year, UOB at 8 percent. Analysts foresee this momentum continuing, creating compensatory fees in place of declines around net interest income.
There is strict control over operating expenses. This ensures maximum profitability in the midst of falling margins for banks.
Key Challenges Margin Compression Ahead
Income will be cut away by lower interest rates as the primary concern. In 2026, net interest margins are anticipated to soften further.
UOB guided for 1.75%-1.80%, thus down to the 1.85%-1.90% from 2025. Both DBS and OCBC expect some moderation due to aggressive deposit repricing.
The worst of SGD rate slide may be over as 3-month SORA stabilizes around 1.25%. The loan growth has been modest in low single digits.
Dividend Story High Yields Attract Investors
Strong capital enables high shareholder returns. Expected dividend yields for 2026 remain high.
| Bank | Forecast 2026 Dividend Yield |
|---|---|
| DBS | 6.1% |
| OCBC | 5.4% |
| UOB | 5.4% |
Options to fund dividends are available because of excess capital and phase-in of potential general provisions, excluding this to UOB’s CPF constraints.
Bank-Specific Assumptions
DBS offers a steady moderate rise. Analysts foresee a 2% growth in EPS (mainly through fee income and good hedge-related acceleration). The net profit may ease slightly from 2025 peaks, while total income stays stable.
OCBC is a gold mine in wealth management. The strong income growth from non-interest sources helps counterbalance the pressure on margins. Transition CEO in the aftermath of early 2026 will provide continuity.
UOB sees some respite. After 2025’s significant write-backs, what matters most is the prospect for earning recovery given the extraordinary normalized provisions. Nevertheless, the watch on Citi’s asset quality remains.
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