To The Moon

At this juncture, 2026 does not look “harsh” in an existential sense — but it does look structurally less generous than 2023–24.

The 2023–2024 cycle was effectively the peak-NIM yield harvest effect of the post-pandemic rate shock. We are now sliding down the normalisation curve.

Observations

1) DBS remains in the “resilient balance-sheet” cohort

Their Q3 surprised on the upside because they have a materially higher CASA proportion, better treasury income contribution, and better operating leverage. Even with NIM compression from 2.11 → 1.96, they are still printing a very strong RoE profile.

2) UOB’s issue is not merely “lower NIM”

The sharp drop in reported Q3 profit is magnified by the credit-provision swing. That is the greater signalling variable, because it implies that UOB’s credit cycle is beginning to show the early edge of stress sensitivity.

3) 2026 looks like a mean-revert year

If the Fed is sitting in a low-3% or high-2% terminal band by then, SG banks will have to earn their keep more via fee/wealth/bancassurance — not net interest income beta.

Conclusion for investors

DBS likely remains the most defensive name.

OCBC is the “value + insurance arm optionality” play.

UOB needs to be priced with a more cautious credit-cycle discount and cannot be treated as a simple NIM normalisation play.

2026 is more difficult — yes — but it is not a crisis thesis.

It is simply a return to normal economics after a historically exceptional rate windfall.