Singapore banks face flat interest income as fees and costs diverge

DBS and OCBC will deliver double-digit fee income and non-interest income growth.

Singapore’s big three banks are expected to log a flat net interest income (NII) for 2026, whilst fee income and credit cost performances will diverge, said CreditSights by Fitch Solutions.

DBS and OCBC are expected to deliver double-digit growth in fee income and non-interest income (NOII), it said in a report on Singapore banks’ H1 2026 performances published in August 2026.

UOB, meanwhile, “may need to work harder to achieve low single-digit growth” in fee income and NOII, the report said.

Credit cost performances are reversed: UOB is expected to log lower credit costs than its peers, whilst DBS and OCBC will have “modestly higher costs.”

Whilst the Singapore Overnight Rate Average (SORA) has bottomed out since May, net interest margin (NIM) pressure has yet to ease for most banks, with all three banks reporting NIM declines in the second quarter.

Loan growth momentum strengthened for the three banks during the quarter, CreditSights said.

Wealth management activity strengthened in Q2, leading to higher net new money inflows and growth in wealth fees compared to Q1. However, OCBC was the only bank to report growth of net fee income in Q2 compared to Q1.

In terms of deposit growth, UOB recovered from a stagnant Q1, OCBC remained solid despite a slight easing, whilst DBS slowed as clients redeployed deposits into investments, CreditSights said.