To The Moon

The combined index weight of $DBS(D05.SI)$ $OCBC Bank(O39.SI)$ $UOB(U11.SI)$ now accounts for around 20% of the FTSE ASEAN All-Share Index, up from around 9% at end-2019. Together, the trio manage approximately S$1.5 trillion in loans and deposits and have a combined market capitalisation of around S$420 billion.

For 2Q26, the trio reported record combined total income of S$13.86 billion, comprising S$8.14 billion in net interest income and a record S$5.72 billion in non-interest income.

Combined Income

Record NOII Driven by Wealth, Treasury and Trading Activity

Combined non-interest income (NOII) for DBS, OCBC and UOB reached a record S$5.72 billion in 2Q26, up from S$5.16 billion in 1Q26 and representing 41% of their combined 2Q26 total income. This compares with around 31% of total income in 2Q23 and reflects the increasing contribution of non-interest income to overall earnings.

Growth in NOII was broad-based. While DBS reported record total income, it also highlighted that wealth management fees reached a new high and that transaction service fees and treasury customer sales reached record levels.

OCBC reported non-interest income rising 51% YoY to a new high, supported by record wealth management income, record customer flow income and stronger insurance income. UOB reported 16% growth in wealth management income, while high-net-worth AUM increased 7% to S$204 billion.

NII Remains Above S$8 Billion Despite Lower Rates

The trio reported combined net interest income (NII) of S$8.14 billion in 2Q26, up from S$8.04 billion in 1Q26. This marked the 15th consecutive quarter of combined NII above S$8 billion, with NII accounting for 59% of combined total income.

Singapore's SORA has moderated from its 2023 and 2024 highs, while regional benchmark rates have also eased over the past two years. Lower interest rates typically compress loan yields and net interest margins, creating headwinds for NII growth. However, the impact has been mitigated by balance sheet growth, asset growth and loan expansion across the three banks.

Management commentary highlighted a range of measures supporting NII. DBS noted that balance sheet growth and hedging mitigated rate headwinds, while OCBC stated that the impact from lower interest rates was largely mitigated by 12% average asset growth. UOB highlighted active funding cost management, balance sheet optimisation and loan expansion as factors that helped cushion the impact of margin compression.

Customer loans continued to grow as at 30 June 2026. DBS reported that loans increased 3% QoQ and 5% YTD, led by non-trade corporate loans. OCBC reported customer loan growth of 13% YoY in constant-currency terms to S$459 billion, while UOB reported gross customer loans of S$120 billion, up from S$115 billion a year earlier.

Asset Quality Remained Stable

Asset quality remained stable in 2Q26, with NPL ratios at 1.0% for DBS, 0.9% for OCBC and 1.6% for UOB. Coverage levels remained robust across the three banks. DBS reported allowance coverage of 130%, or 196% after considering collateral. OCBC reported NPA coverage of 163%, while UOB reported coverage of 306% after collateral.

According to the recent IMF country report, Singapore's domestic systemically important banks remain resilient under MAS stress-test scenarios, supported by strong capital positions, healthy profitability, low non-performing loans and ample liquidity, including adequate FX liquidity buffers. The report also highlighted Singapore's substantial fiscal space, large official reserves and significant external surplus as additional buffers against global shocks.