DBS, OCBC hit new records but UOB lags

[SINGAPORE] Shares of two local banks, DBS and OCBC , hit all-time highs on Tuesday (Dec 16), while UOB trailed its peers.

Singapore’s largest lender, DBS, reached a new record of S$56 at 9.07 am, up 28.1 per cent year to date, with some 1.1 million shares changing hands. The bank was assigned a target price of S$70 by JPMorgan on Nov 28.

OCBC shares also rose to a fresh high of S$19.44 at 11.52 am, up 16.5 per cent year to date, with some 1.9 million shares traded. A DBS Group Research report dated Dec 8 assigned it a target price of S$19.80.

Meanwhile, UOB traded as high as S$34.79 on Tuesday morning, down over 4 per cent year to date. DBS Group Research assigned it a target price of S$33.90.

The new records follow DBS’ appointment by the Chinese central bank to be the first local bank to serve as a yuan clearing lender on Monday.

The records also come as the banking sector is projected to get strong tailwinds, driven by dividend yields of up to 6 per cent and excess capital, the DBS Group Research report indicated.

Notably, the report forecast continued inflows into the banking sector for 2026, amid further deployment of the Equity Market Development Programme fund.

“We expect cumulative inflows into Singapore, ongoing since 2024, to persist through 2026. Operating expenses control will likely be stringent to manage (forecasted) FY2026 net profit,” the report indicated.

It added that robust wealth management inflows are “structurally here to stay”, due to Singapore’s status as a haven and the Singapore dollar’s defensive characteristics.

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Similarly, JPMorgan said that the local banks are set for “significant improvement in value creation” over a multi-year period and that DBS is expected to re-rate to a point where it is “unjustifiably expensive”. The investment bank also noted that OCBC shares are expected “to do well” as the lender raises payout ratios.

Meanwhile, DBS Group Research adopted a “cautious” stance towards UOB, noting that “woes for (its) asset quality issues may not be over”, while JPMorgan projected that the stock would face volatility over the next six months.

Q3 earnings

For the quarter ended September, DBS and UOB both beat expectations. DBS posted a 2 per cent year on year decline in net profit of S$2.95 billion due to the impact of global minimum tax, even though its total income reached a new high of S$5.93 billion.

OCBC recorded steady net profit of S$1.98 billion, shored up by higher non-interest income and lower allowances, even as net interest income and net interest margin fell against a softening interest rate environment.

For the period, UOB’s earnings plunged 72 per cent to S$443 million, missing the S$1.34 billion consensus estimate from a Bloomberg poll. The decline came as UOB’s allowance for credit and other losses rose to S$1.36 billion as at Sep 30, from S$304 million in the year-ago period.