Singapore banks reach $1.2t as regional market weight doubles

Their index share has climbed to around 20%.

Singapore's big listed banks managed approximately $1.17t (S$1.5t) in loans and deposits and have a combined market capitalisation of around $327.6b (S$420b) in the second quarter of the year (Q2 2026).

According to SGX’s market update, DBS Group Holdings (DBS), Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB) saw a combined index weight of Singapore's three STI banks grow to around 20% of the FTSE ASEAN All-Share Index, up from around 9% at end-2019.

“For Q2 2026 [the second quarter of 2026], the trio reported record combined total income of $10.8b (S$13.86b), comprising $6.3b (S$8.14b) in net interest income and a record $4.5b (S$5.72b) in non-interest income,” SGX said.

DBS said in a report that “the stock market rally has become increasingly concentrated, with banks and SGX contributing 95% of the STI’s gains YTD and more than 100% of gains since the US-Iran conflict.”

“This masks weakness across the broader market. With bank headline valuations stretched and dividend support fading post ex-dates, we see rotation into alternative themes with stronger H2 2026 catalysts, including value-unlocking opportunities, EQDP beneficiaries and selective mid-cap growth stocks,” the report read.

SGX said that the three banks’ combined non-interest income (NOII) reached a record $4.5b (S$5.72b) in Q2 2026, up from $4.0b (S$5.16b) the previous quarter and representing 41% of their combined Q2 2026 total income.

This compares with around 31% of total income in Q2 2023 and reflects the increasing contribution of non-interest income to overall earnings.

SGX noted that the NOII growth was broad-based. DBS saw record total income, with wealth management fees, transaction service fees and treasury customer sales all hitting new highs in the quarter.

OCBC's non-interest income climbed 51% year-on-year to a record, driven by record wealth management and customer flow income alongside firmer insurance contributions.

At UOB, wealth management income grew 16%, whilst high-net-worth AUM rose 7% to $159.1b (S$204b).

The three banks' combined net interest income (NII) came in at $6.3b (S$8.14b) in Q2, edging up from $6.3b (S$8.04b) the prior quarter and extending their run of combined NII above $8b to 15 consecutive quarters. NII made up 59% of their combined total income for the period.

In an earlier report, CGS International said that Singapore banks have the potential to see stronger NII growth in FY2027 thanks to higher US interest rates.

SGX said that SORA has pulled back from its 2023 and 2024 peaks, and regional benchmark rates have similarly eased over the past two years. The softer rate environment weighs on loan yields and net interest margins, posing a headwind to NII growth.

The three banks have nonetheless cushioned that impact through balance sheet growth, asset growth and loan expansion. Across the three banks, SGX said that management pointed to several measures that helped sustain NII.

DBS cited balance sheet growth and hedging as buffers against rate headwinds, whilst OCBC said the drag from lower interest rates was largely offset by 12% average asset growth. UOB credited active funding cost management, balance sheet optimisation and loan expansion with cushioning the effect of margin compression.

Customer loans also continued to expand as at 30 June 2026, with DBS reporting loans increasing 5% year-to-date, led by non-trade corporate loans.

OCBC reported customer loans growing 13% year-on-year in constant-currency terms to $357.0b (S$459b), whilst UOB reported gross customer loans of $93.6b (S$120b), up from $89.7b (S$115b) last year.

“Asset quality remained stable in Q2 2026, 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,” SGX said.

“DBS reported allowance coverage of 130%, or 196% after considering collateral. OCBC reported NPA coverage of 163%, whilst UOB reported coverage of 306% after collateral,” it added.

($1.00 = S$1.28)