Singapore Banks in 2026: Are DBS, OCBC and UOB Still Worth Buying After the Rally?

Author: Zion Zhao Real Estate | 88844623 | 狮家社小赵 | wa.me/6588844623

Author’s note and disclaimer: For general education and market literacy only. Not financial, investment, legal, accounting, or tax advice, and not an offer, solicitation, or recommendation. Information is general and may be inaccurate or change. No liability accepted. Investing involves risk, including loss of principal; past performance is not indicative of future results. 

DBS, OCBC and UOB in 2026: Valuations, Dividends and the Next Investment Call

Singapore Banks in 2026: Still Attractive, but the Easy Trade Is Over

Singapore’s banks remain investable in 2026, but this is no longer a simple momentum story. After several years of strong share price performance, the question is not whether DBS, OCBC and UOB are well-run institutions. They are. The more important question is whether investors are still being paid enough, at today’s valuations, for a sector that is moving from peak rate support into a more normalised earnings environment. That distinction matters because the next leg of returns will depend less on the broad tailwind of high interest rates and more on capital allocation, fee income, asset quality, loan growth and valuation discipline (DBS Group Holdings Ltd., 2026a; Oversea-Chinese Banking Corporation Limited [OCBC], 2026a; United Overseas Bank Limited [UOB], 2026a).

The FY2025 results confirm that the sector remains fundamentally strong, but they also show clear divergence beneath the surface. DBS continues to be the flagship franchise. It delivered record total income of S$22.9 billion, record pre-tax profit of S$13.1 billion and a still-excellent return on equity of 16.2%. Its customer loans and deposits both expanded, fee income reached a new high, and asset quality remained healthy, with a non-performing loan ratio of 1.0%. This is not a bank in decline. It is a premier franchise transitioning from extraordinary interest-rate support into a more balanced and diversified earnings model (DBS Group Holdings Ltd., 2026a; DBS Group Holdings Ltd., 2026b; DBS Group Holdings Ltd., 2026c).

OCBC may have produced the most balanced earnings profile of the group. FY2025 net profit slipped 2% to S$7.42 billion, but profit before tax actually rose to a record S$9.12 billion. Total income was also a record, supported by strong non-interest income growth, especially in wealth management, insurance and trading-related businesses. Loans and deposits both grew strongly, cost discipline remained sound, and the bank’s non-performing loan ratio stayed at 0.9%. In practical terms, OCBC demonstrated that a Singapore bank does not need perfect margin conditions to deliver solid performance, provided its revenue mix is sufficiently diversified and its asset quality remains tight (OCBC, 2026a; OCBC, 2026b).

UOB’s results looked weakest on the headline, but the headline is not the whole story. Net profit fell 23% to S$4.7 billion, yet operating profit still came in at S$7.7 billion. The main drag was not a collapse in the core franchise, but pre-emptive general allowances set aside earlier in the year to strengthen provision coverage amid macroeconomic uncertainty. Fee income hit a record, loans and deposits still grew, and the bank’s non-performing loan ratio remained stable at 1.5%. That makes UOB less a story of operational deterioration and more a story of conservative accounting and cautious balance sheet management, which the market may still be pricing with a discount (UOB, 2026a; UOB, 2026b).

This is why 2026 should not be framed as a binary call on whether lower rates are good or bad for banks. Lower rates typically pressure net interest margins, but they can also support credit demand, improve refinancing conditions and shift the earnings mix toward fee businesses. DBS itself guided that 2026 total income should remain around 2025 levels even if net interest income softens, because non-interest income is expected to continue growing. In other words, Singapore banks are not entering 2026 without earnings levers. They are entering it with different earnings levers than the ones that powered the previous rally (DBS Group Holdings Ltd., 2026c; DBS Group Holdings Ltd., 2026d; OCBC, 2026a; UOB, 2026a).

Cost efficiency remains one of the sector’s underappreciated strengths. DBS reported a cost-to-income ratio of 40.4% for FY2025, OCBC reported 40.0%, and UOB reported 44.6%. Those are still disciplined levels for large universal banks operating across regional markets. In a world where margin expansion is fading, efficiency becomes more important, not less. Investors should pay closer attention to banks that can preserve returns through operating discipline rather than relying only on the external gift of higher rates (DBS Group Holdings Ltd., 2026b; OCBC, 2026a; UOB, 2026b).

Dividends remain central to the investment case, but investors need to separate regular dividends from temporary capital return programmes. DBS paid S$2.46 in ordinary dividends for FY2025, along with capital return dividends, and signalled that this enhanced return of capital is likely to continue through FY2027, barring unforeseen circumstances. OCBC paid 83 cents in ordinary dividends and added a special dividend, while UOB paid S$1.56 in regular dividends and returned surplus capital separately through special dividends. That means all three banks still offer meaningful income support, but not all headline yields are equally recurring. Serious investors should focus first on ordinary payout durability, then treat specials as upside rather than entitlement (DBS Group Holdings Ltd., 2026a; OCBC, 2026a; UOB, 2026a).

Relative valuation is now where the real debate begins. DBS is the most expensive, but also the clearest quality leader. Its premium is supported by superior returns, stronger capital return signalling and more visible franchise depth. OCBC sits in the middle and arguably offers the cleanest balance between quality, diversification and valuation. UOB is the cheapest and therefore the most obvious value candidate, but that cheaper multiple reflects investor caution around earnings momentum and provisioning. Put differently, the sector is still attractive, but the names are no longer interchangeable. Investors now need to choose what they want to pay for, quality, balance or value (DBS Group Holdings Ltd., 2026a; OCBC, 2026a; UOB, 2026a).

There is also a broader portfolio point here. Singapore bank dividends still compare favourably with the 10-year Singapore Government Securities yield of 2.05% on 11 March 2026, which helps explain why bank equities continue to matter for income-oriented investors. But that yield advantage comes with equity volatility, valuation risk and cyclical exposure. The banks are still useful core holdings for many portfolios, but they are no longer a blunt macro trade. They are now a test of selectivity and discipline (Monetary Authority of Singapore, 2026; DBS Group Holdings Ltd., 2026a; OCBC, 2026a; UOB, 2026a).

The bottom line is straightforward. Singapore banks are still worth owning in 2026, but they should no longer be bought on autopilot. DBS remains the premium compounder. OCBC looks like the best-balanced all-rounder. UOB is the contrarian value case. The sector still offers resilience, capital strength and credible income, but the easy rerating is behind us. What remains is a more demanding market, and that is exactly where informed investors can still find opportunity.

References

DBS Group Holdings Ltd. (2026a, February 9). Fourth quarter 2025 financial results press statement. DBS. https://www.dbs.com/investors/financials/quarterly-financials

DBS Group Holdings Ltd. (2026b). DBS annual report 2025. DBS. https://www.dbs.com/iwov-resources/images/investors/other-materials/2026/DBS%20Annual%20Report%202025.pdf

DBS Group Holdings Ltd. (2026c, February 9). 4Q 2025 media conference transcript. DBS.

DBS Group Holdings Ltd. (2026d, February 10). 4Q 2025 analyst call transcript. DBS.

Monetary Authority of Singapore. (2026, March 11). Daily SGS prices. https://eservices.mas.gov.sg/statistics/fdanet/SgsBenchmarkIssuePrices.aspx

Oversea-Chinese Banking Corporation Limited. (2026a, February 25). FY25 media release and financial highlights. OCBC. https://www.ocbc.com/group/investors/index.page

Oversea-Chinese Banking Corporation Limited. (2026b, February 25). FY25 condensed financial statements. OCBC.

United Overseas Bank Limited. (2026a, February 24). UOB’s FY25 operating profit at S$7.7 billion. UOB. https://www.uobgroup.com/uobgroup/newsroom/2026/uobgroup-fy25-financial-results.page

United Overseas Bank Limited. (2026b). FY25 financial highlights. UOB. https://www.uobgroup.com/investor-relations/financial/index.html

After the Surge: What Singapore Banks Still Offer Investors in 2026

Singapore banks remain investable in 2026, but the easy rerating is over. DBS leads on quality, OCBC offers the best balance, and UOB is the value case. Strong dividends, sound balance sheets and resilient earnings still matter, but valuation discipline now matters more.

Singapore’s banking outlook matters directly to property decisions in Singapore because financing conditions shape affordability, buyer sentiment, rental demand and investment returns. When bank margins normalise and interest rates ease, borrowing conditions can become more supportive for homebuyers, investors and businesses. That can influence upgrading demand, private residential activity, commercial expansion and industrial leasing appetite. At the same time, valuation discipline in bank stocks reflects a wider market message: investors are becoming more selective, and that same selectivity is now crucial in real estate.

For buyers, this means timing, loan structure, asset selection and exit strategy matter more than chasing headlines. For sellers, it means positioning, pricing and negotiation must be calibrated to real demand rather than optimism alone. For landlords, shifts in rates and business confidence can affect tenant quality, leasing velocity and rental resilience. For investors, the comparison between banks, REITs and property highlights a bigger truth: capital should be allocated carefully across asset classes, with attention to cash flow, risk and long term value.

This is where I add value. As a Singapore real estate agent with a strong grounding in macroeconomics, finance and market analysis, I help clients connect the bigger economic picture to practical property decisions. Whether you are buying, selling, renting or investing in residential, commercial or industrial property, I provide clear strategy, market positioning, negotiation support and execution with precision.

If you want property advice that goes beyond listings and square footage, and is anchored in real market intelligence, reach out to me for a professional, tailored and non obligatory consultation.