This looks far more like post-earnings digestion than the start of a structural bank rotation.
For DBS Group, the sell-off is understandable. The Q4 miss was driven by net interest margin compression, not a deterioration in asset quality or franchise strength. With rates normalising, NIM pressure is a sector-wide reality rather than a DBS-specific flaw. Fee income growth of +13.5% shows the underlying business mix is holding up well.
Context matters. After a ~60% rally and fresh highs, expectations were elevated. Any earnings disappointment was likely to trigger profit-taking, especially as investors recalibrate forward ROE assumptions in a lower-rate environment.
Crucially, capital returns change the risk profile. A 38% jump in total dividends to S$3.06, with visibility on capital return payouts through 2027, puts a meaningful floor under the stock. That tends to cap downside and encourages income-focused investors to step in on weakness.
A deeper rotation would require clearer evidence of:
accelerating credit stress,
sustained margin collapse beyond guidance, or
regulatory constraints on capital returns.
None of these are visible yet. Near term, DBS is likely to consolidate rather than trend sharply lower, with share price action driven more by rate expectations and relative yield appeal than by earnings growth.
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- chaicka·51 minutes agoTOPCommitted Dividend $0.66 and Capital Return Dividend $0.15 through 2027 translates to a payout ratio of 60%, quite above the norm. Current P/E and P/B are pretty elevated. In short, late 2025 and early 2026 have seen flood in that resulted in abnormal elevation (funds of foreign inbound family offices?) which spans across a few stocks (eg OCBC). Correction/Revaluation is inevitable, esp with more Fed Rate cuts coming until 2027. 😁LikeReport
- Traderdude1301·02-10 21:50Agreed this is only short-term consolidation for DBS! Recovery is round the corner with increased dividends guaranteed for 2026 and 2027, increase in non interest income by double digits, increase in wealth management assets by 19%, strong Q4 deposit growth, record profits etc.LikeReport