DBS Favoured by Analysts Ahead of Q3 Earnings Amid Singapore Bank Slump
Singapore's three largest banks collectively shed over US$22 billion in market value last week, though analysts largely maintain positive outlooks for DBS.
Singapore Banks Face Market Value Decline
Singapore's three major banks experienced a significant market value reduction last week, collectively losing more than US$22 billion. This downturn began on 7 October 2026, following Citi's downgrade of OCBC from a "hold" to a "sell" rating, alongside its reiterated "sell" stance on UOB.
Despite this market pressure, analyst sentiment remains largely positive, particularly for DBS. Macquarie Group highlighted a "favourable" lending environment, supported by Monetary Authority of Singapore (MAS) statistics showing a 16 per cent year-on-year loan growth in August 2026.
DBS Maintains Strong Analyst Support
DBS continues to be a preferred pick among analysts. CGS International (CGSI) upgraded its rating on DBS to "add" from "hold" on 12 October 2026, simultaneously increasing its target price to S$79.50 from S$77.10.
Citi also holds a "buy" rating on DBS, with a S$86.80 target price, characterising the bank as an "Asia wealth proxy." CGSI analysts projected a 2.9 per cent year-on-year growth in DBS's third-quarter non-interest income, underpinned by a 7.4 per cent rise in wealth-management fees due to sustained net new money inflows. Macquarie Group expects DBS to meet Q3 expectations, forecasting an estimated 4.4 per cent annualised dividend yield.
Divergent Views on OCBC and UOB
Analyst opinions on UOB are varied. Macquarie's Jayden Vantarakis assigned an "outperform" rating and a S$45.29 target price to UOB, noting its 30 per cent price-to-earnings discount. Conversely, Citi's Tan Yong Hong maintained a "sell" rating with a S$38 target price, predicting a 9 per cent quarter-on-quarter profit decline for UOB in Q3 to S$1.35 billion.
For OCBC, Maybank Securities analysts Thilan Wickramasinghe and Amirul Rusydy issued a "buy" call with a S$37.23 target price, citing its comprehensive "whole-of-wealth" strategy. CGSI also noted OCBC's Q2 benefits from its insurance subsidiary Great Eastern, which recorded 25.2 per cent year-on-year growth in New Business Embedded Value (NBEV).
Upcoming Q3 Earnings to Offer Clarity
Investors await the banks' third-quarter earnings reports, which are expected to provide further clarity on performance and outlook. UOB is scheduled to release its Q3 results on 4 November 2026. DBS will follow on 5 November 2026, with OCBC's earnings expected on 6 November 2026.
These disclosures will shed light on net interest margins (NIMs) and loan growth, which some analysts anticipate will remain flat quarter-on-quarter for NIMs at certain institutions.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
Comments.
Comments are moderated. We remove what is unlawful, abusive or off-topic, and and you remain responsible for what you post.
Reader comments open soon. Until then, corrections and responses go to our newsroom, and we publish what we get wrong on Corrections.