Singapore’s Banking Rally Has Entered a New Era — Here’s What Investors Need to Know

Singapore’s stock market is having a moment.

The Straits Times Index (STI), after spending years moving largely sideways, broke above 4,000 in 2025, crossed 5,000 in 2026 and has now climbed beyond 5,700. Much of that rally has been powered by an unlikely story: Singapore’s three major banks continuing to deliver record earnings even as interest rates have fallen.

DBS, OCBC and UOB all reported their second-quarter 2026 results on 6 and 7 August. All three beat expectations, all three increased dividends and all three grew profits year on year.

Together with SGX, the three banks have contributed approximately 95% of the STI’s gains this year.

So, what is driving the rally — and can the momentum continue?

The Banking Story Has Changed

Just two years ago, the outlook for Singapore’s banks appeared much less promising.

When the US Federal Reserve began cutting interest rates in late 2024, the conventional expectation was that lower rates would squeeze banks’ earnings. After all, banks traditionally make money from the difference between what they pay depositors and what they earn from lending.

That spread has indeed narrowed.

But the banks have found another engine of growth: wealth management.

As Singapore strengthens its position as a global wealth hub, increasing amounts of capital are flowing into the city-state. Singapore’s assets under management have crossed US$4 trillion by 2026, while the number of family offices surpassed 2,000 in 2025 — a 400% increase from 2020.

For DBS, OCBC and UOB, these inflows represent a potentially powerful source of recurring fee income.

Unlike traditional lending income, wealth-management fees are relatively capital-light. Banks earn fees when clients invest in funds, equities and structured products, without needing to commit the same amount of balance-sheet capital associated with lending.

That structural shift is increasingly changing the way investors should look at Singapore’s banks.

DBS: A S$516 Billion Wealth Engine

DBS delivered another record quarter.

Second-quarter net profit reached S$3.08 billion, up 9% year on year and 5% quarter on quarter. Total income crossed S$6 billion for the first time, reaching S$6.09 billion, while first-half net profit hit a record S$6.01 billion.

But perhaps the most important number was its wealth-management business.

DBS’s wealth assets under management reached S$516 billion, crossing the half-trillion-dollar mark for the first time and rising 17% year on year.

Wealth-management fees surged 42% to S$919 million, while total net fee income climbed 25% to a record S$1.46 billion.

This growth is particularly significant because DBS is simultaneously experiencing pressure on its traditional interest income. Its net interest margin fell to 1.87%, compared with 2.05% a year earlier, as SORA declined sharply.

In other words, the wealth-management engine is increasingly helping to offset the pressure from lower interest rates.

DBS declared a S$0.81 per-share Q2 dividend, up from S$0.75 a year earlier, and is also progressing with a S$3 billion share buyback programme.

OCBC: Wealth, Trading and Insurance All Take Off

OCBC delivered the strongest earnings beat among the three banks.

Second-quarter net profit rose 22% year on year to S$2.22 billion, surpassing S$2 billion in a single quarter for the first time. Total income also reached a record S$4.17 billion.

What stands out is how broad-based the growth was.

Three separate income streams reached records at the same time:

• Wealth-management fees: S$470 million, up 44%

• Trading income: S$695 million, up 85%

• Insurance income: S$382 million, up 68%

Trading activity was particularly strong, driven by client transactions in precious metals, currencies and structured products, while gains at Great Eastern Holdings also benefited from the equity-market rebound.

OCBC’s banking wealth assets under management increased 13% to S$350 billion, with new client money flowing across its wealth segments.

Wealth-management income now accounts for 41% of OCBC’s total group income, compared with 36% a year earlier.

The bank also raised its interim dividend by 15% to S$0.47 per share — the fastest dividend growth among the three banks this results season.

UOB: Regional Growth Meets Wealth Management

UOB’s results were more measured, but they continued to demonstrate the strength of its regional franchise.

Second-quarter net profit rose 10% year on year to S$1.478 billion, while first-half net profit reached S$2.915 billion.

Its ASEAN footprint remains a key differentiator.

Trade loans grew 33% year on year in the first half, while ASEAN-4 trade loans increased 14%. Current and savings account balances also rose 9%, reflecting continued cross-border business activity across the region.

UOB’s wealth-management fees reached a record S$243 million, up 29% year on year.

There are, however, areas investors will continue to watch. New non-performing assets reached S$902 million in Q2, largely due to one Greater China real-estate account booked in Hong Kong. Management said the portfolio remains well collateralised and credit costs are still within guidance.

Meanwhile, UOB’s net interest margin fell to 1.74% in Q2 and exited July at 1.71%. Management expects SORA to bottom out and trend slightly higher in the second half of the year, potentially easing some of the pressure.

UOB also announced that Allianz Global Investors will acquire UOB Asset Management for S$555 million, with completion expected in 2027. The transaction is expected to generate approximately S$330 million in pre-tax gains upon completion.

Its interim dividend increased to S$0.88 per share, maintaining its 50% payout policy.

Three Trends Investors Should Watch

Taken together, these results point to a bigger shift in Singapore’s market.

1. Singapore’s banks are becoming less dependent on high interest rates

All three banks grew earnings despite substantially lower SORA levels.

The reason is the growing contribution from wealth management, trading and other fee-based businesses. The traditional lending model still matters, but it is no longer the only driver of profitability.

2. Singapore’s wealth hub status is becoming structural

The inflow of international wealth into Singapore is more than a short-term market trend.

As wealthy families establish Singapore as a base for their assets, businesses and increasingly their families, DBS, OCBC and UOB are positioned to benefit from the resulting demand for private banking, investment and wealth-management services.

3. Investors are being rewarded through dividends

All three banks increased their interim dividends:

DBS: S$0.81 per share
OCBC: S$0.47 per share
UOB: S$0.88 per share

The growing contribution from capital-light businesses gives the banks greater flexibility to return earnings to shareholders.

What Could This Mean for Singapore Investors?

The strength of Singapore’s banking sector is having an outsized impact on the broader market.

For investors looking for exposure to Singapore equities, DBS, OCBC and UOB are available through a single Phillip Nova account.

Investors seeking broader exposure can also consider the Straits Times Index ETF (SGX: ES3 / G3B), where the three banks together account for approximately 55% of the index. Those seeking leveraged exposure may also consider STI Futures (SGX: ST).

The bigger takeaway is that Singapore’s market story may be evolving beyond interest rates.

The combination of strong bank earnings, rising wealth inflows, resilient dividends and Singapore’s position as a regional financial hub is creating a market backdrop investors may want to keep on their radar.

Invest in Singapore and Get Rewarded

If Singapore’s strongest market rally in years is being driven by its banks, now could be an opportunity to invest in the companies leading the charge — and get rewarded while you do.

For a limited time, new clients can also receive 40 FREE LSS Shares (worth S$120 on 2 July 2026) when they:

• Open a new NOVA Trading Account

• Deposit S$1,000

• Invest S$1,000 in Singapore-listed stocks or ETFs

• Maintain the deposit for 30 consecutive calendar days

Start your Singapore investing journey with Phillip Nova today.

Trade Singapore stocks, futures, ETFs and ETPs on NOVA and stay ready to capture opportunities as market-moving events unfold.

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