The year 2026 will see Singapore’s big three banks, DBS, OCBC, and UOB, having a year of moderation after the strong performances in 2025. Despite the fact that lower interest rates will squeeze margins, analysts predict that the banks will have steady profits that are supported by the growth in wealth management as well as the implementation of controls on costs.
At this moment in time, that is, at the very end of 2025, investors are observing how banks will be able to portray net interest income that is falling along with rising fees and dividends. Also, the strong capital positions along with the inflows into Singapore, are making the sector still attractive.
Challenges from Lower Interest Rates
The global rate reductions are expected to compress the net interest margins (NIM) in 2026. The banks are anticipating a decrease in their net interest income, but they believe that their total income could remain stable as a result of their non-interest income sources.
The scenario under discussion will be a test of banks’ capabilities in diversification beyond the traditional lending.
Wealth Management as a Bright Spot
The banks are experiencing an increase in wealth fees and assets under management, which is a common trend for the three banks. The affluent investor class is continuously flowing in and thus boosting the recurring income.
This segment plays a role in mitigating margin pressure while also providing support for the earnings to remain stable.
Dividend Appeal Remains Strong
Analysts’ predictions are for high yields: DBS about 6.1%, OCBC and UOB at 5.4% each. The robustness of the capital enables the banks to make generous payouts and also to carry out buybacks if desired.
Such dividend yields are considered reliable by income-focused investors in the uncertain market conditions.
DBS: Leader in Digital and Wealth
DBS sees the total income to be about the same as in 2025, and a very small decline in net profit. Besides them, the banks are using hedging and wealth momentum as buffers.
It is very common for DBS to come out on top when it comes to consistent execution.
OCBC: Strong Wealth Momentum
OCBC is the fastest-growing wealth bank among the peers. The bank is not projecting any big jumps or falls in profits, however, it expects the non-interest income to take over the NII.
The bank’s outperformance in terms of fees will be added to a positive tone.
UOB: Rebound After Provisions
UOB has to deal with issues regarding the quality of its assets, but on the other hand, its provisions may go back to normal. The bank is expected to have its earnings rebounding in 2026 despite the fact that the margins are likely to soften.
UOB still has a cautious approach towards credit costs.
2026 Forecast Highlights
The table below summarizes the analysts’ predictions regarding the banks (FY2026 estimates):
| Bank | Expected Dividend Yield | Profit Outlook | Key Driver |
|---|---|---|---|
| DBS | ~6.1% | Slight dip; stable income | Wealth fees, hedging |
| OCBC | ~5.4% | Steady/moderate growth | Strongest wealth momentum |
| UOB | ~5.4% | Potential rebound | Normalising provisions |
Risks to Watch
One of the risks that may reduce the banks’ profits in Singapore, especially UOB’s asset quality, and/or faster rate cuts, or geopolitical tensions is that the banks’ strong buffers will help them mitigate the situation.
The banks in Singapore will be entering the year 2026 in a strong position with moderate profit growth, high dividends, and wealth-driven stability, which will help them to overcome the challenges posed by the interest rates. DBS leads in terms of yields, OCBC is the best in terms of fees collected, and UOB’s eye is on the rebound.
To stay updated, please check the latest analyst reports on SGX or bank websites. Always consider your risk tolerance before investing in bank stocks.