To The Moon

The three $Straits Times Index(STI.SI)$ banks, $DBS(D05.SI)$ $OCBC Bank(O39.SI)$ $UOB(U11.SI)$, reported combined net interest income (NII) of S$8.302 billion in 3Q26, up 2.0% from S$8.142 billion in 2Q26.

This marked the 16th consecutive quarter of combined NII above S$8 billion. DBS reported NII of S$3.711 billion, OCBC S$2.313 billion and UOB S$2.278 billion. For context, combined NII has grown from S$4.3 billion in 3Q16 and S$5.2 billion in 3Q21. 

Combined non-interest income (NOII) fell 18.5% QoQ from S$5.715 billion in 2Q26, with 2Q26 the highest in the quarterly series, to S$4.657 billion in 3Q26. DBS NOII declined 15.0% to S$2.134 billion, OCBC fell 26% to S$1.420 billion and UOB fell 15.0% to S$1.103 billion. The decline in NOII was driven by trading, investment, insurance and one-off divestment income, while customer-related businesses held up better. 

DBS markets trading income fell 68% QoQ to S$152 million, which DBS attributed to unfavourable equity-market conditions. OCBC’s trading income fell 33% to S$465 million, as record customer-flow income was more than offset by mark-to-market losses on Great Eastern’s bond portfolio amid higher interest rates and the absence of significant equity gains recorded in 2Q26. UOB’s trading and investment income declined 15% to S$322 million, which UOB attributed to less favourable market conditions. Most of the 41% QoQ fall in UOB’s other non-interest income reflected the absence of non-recurring divestment gains recorded in 2Q26.

Customer-related activity remained firmer. DBS treasury customer sales and other income rose 1% QoQ and 19% YoY to S$685 million, while OCBC customer-flow trading income rose 29% YoY to a record S$480 million. UOB’s customer-related treasury income reached a new high, supported by client engagement and demand for hedging solutions.

Research analysts focused less on the resilience of NII and more on the outlook for non-interest income. While 3Q trading income was weaker, attention centred on whether wealth-fee growth can meet FY27 expectations, given strong AUM and net new money but some moderation in fee growth and take rates.

Broader Banking Industry

Preliminary September MAS data showed continued growth in Singapore commercial-bank loans and deposits through 3Q26. Loans and advances reached S$1.543 trillion, up 4.6% from June and 14.8% YoY, while deposits and balances of non-bank customers rose to S$2.160 trillion, up 2.5% from June and 7.4% YoY. Demand deposits reached S$709 billion, up 0.8% from June and 7.2% YoY, while fixed deposits rose to S$1.018 trillion, up 5.0% from June and 6.5% YoY. 

Three-month compounded SORA rose from 1.08% on 30 June to 1.23% on 30 September to 1.32% at present. Market pricing for the 8-9 December FOMC meeting shifted towards rates remaining at 400-425 bp. The implied probability increased from 32.2% at end-June and 31.3% at end-September to 68.4% by 5 November. 

Wealth Management

A 2026 Morgan Stanley and Oliver Wyman report estimated that global household financial wealth reached US$341 trillion in 2025 and could approach US$469 trillion by 2030. Asia Pacific is projected to grow the fastest at 7.9% annually through 2030.

The report also highlighted the importance of distinguishing headline asset growth from organic flows. Around two-thirds of the increase in household financial wealth in 2025 came from market and currency effects rather than net new money. In the report’s benchmark of 75 large wealth managers, revenue grew 19% between 2023 and 2025, although the conversion of revenue growth into profit varied materially across firms.

The three banks continued to report strong wealth franchises in 3Q26, although quarterly fee trends varied. DBS reported record wealth AUM and net new money, while its wealth fees remained among its three highest quarters on record. OCBC’s wealth fees declined 6% QoQ but remained the second highest on record, while banking wealth-management AUM reached a new high. UOB’s record net fee income was supported by sustained wealth-management growth.

$DBS(D05.SI)$

For 3Q26, DBS’s total income was S$5.845 billion, down 4% QoQ and 1% YoY, as continued commercial-book growth was offset by lower markets trading income. Net profit was S$2.81 billion, down 9% QoQ and 5% YoY.

NII was S$3.711 billion, up 4% QoQ and 4% YoY. Group NIM was unchanged QoQ at 1.87%, compared with 1.96% in 3Q25. Balance-sheet growth and proactive hedging helped offset lower SORA, while loans and deposits both grew 3% QoQ in constant-currency terms.

Net fee and commission income declined 2% QoQ but rose 6% YoY to S$1.432 billion. Wealth management fees rose 9% YoY to S$864 million, while record net new money lifted wealth AUM 5% QoQ to a new high of S$544 billion. Treasury customer sales and other income increased 1% QoQ and 19% YoY to S$685 million. Markets trading income fell 68% QoQ and 65% YoY to S$152 million. DBS attributed the decline to unfavourable equity-market conditions, following stronger markets trading income in 1H26.

Asset quality remained resilient. The NPL ratio improved to 0.9% from 1.0% in 2Q26, while specific allowances were 17 bp of average loans, compared with 16 bp in 2Q26. Total allowance coverage stood at 134% of NPAs and 202% of unsecured NPAs.

For 2027, DBS expects total income growth in the mid-single-digit range, supported by its loan pipeline, deposit growth and continued structural growth in wealth management. The outlook assumes two further US Federal Reserve rate increases through end-2027, SORA averaging around 1.6% and a stronger Singapore dollar. The cost-income ratio is expected to be in the low-40% range, with specific allowances of 17-20 bp. DBS provided no specific guidance for markets trading income.

$OCBC Bank(O39.SI)$

For 3Q26, OCBC’s total income was S$3.733 billion, down 11% QoQ and 2% YoY. Group net profit was S$2.042 billion, down 8% QoQ but up 3% YoY. Banking Operations total income and net profit reached record levels, up 7% and 16% YoY respectively, while the group result was moderated by weaker investment performance at Great Eastern.

NII rose 2% QoQ and 4% YoY to S$2.313 billion, its highest level in six quarters. QoQ, growth in average assets and higher asset yields were partly offset by increased funding costs. NIM narrowed 4 bp QoQ to 1.66%, from 1.70% in 2Q26, and was 18 bp lower YoY. Customer loans increased 2% QoQ on a reported basis, or 3% in constant-currency terms, and rose 14% YoY.

NOII fell 26% QoQ and 10% YoY to S$1.420 billion. Net fee income declined 1% QoQ to S$735 million but rose 8% YoY, supported by broad-based fee growth, particularly from wealth, loan and trade-related activities. Wealth fees declined 6% QoQ to S$442 million but increased 3% YoY and were the second highest on record. Banking wealth-management AUM continued to reach a new high.

Trading income fell 33% QoQ and 10% YoY to S$465 million. Customer-flow trading income rose 29% YoY to a record S$480 million, but this was more than offset by mark-to-market losses on Great Eastern’s bond portfolio amid higher interest rates and the absence of significant gains on its equity portfolio recorded in 2Q26. Insurance income fell 48% QoQ to S$198 million, reflecting market-driven valuation losses from interest-rate movements.

Asset quality remained resilient, with the NPL ratio improving to 0.8% from 0.9% in 2Q26. Total NPA coverage increased to 168%, while 3Q26 credit costs declined to 6 bp from 14 bp in 2Q26.

OCBC upgraded its FY26 guidance to low-double-digit loan growth and at least mid-single-digit total-income growth, with NII expected to be flat to slightly lower. It expects a cost-to-income ratio in the low-40% range and credit costs of 15-20 bp. The guidance assumes average three-month SORA of around 1.2%, one additional Federal Reserve rate increase in 4Q26 and average three-month HIBOR of around 2.9%. OCBC expects to complete its S$2.5 billion capital-return plan by FY26.

$UOB(U11.SI)$

For 3Q26, UOB’s total income was S$3.381 billion, down 6% QoQ and broadly flat YoY. NII was S$2.278 billion, down 1% QoQ but up 1% YoY. NIM narrowed 6 bp QoQ to 1.68%, from 1.74% in 2Q26, amid higher funding costs. Customer loans grew 3% QoQ and 6% YoY to S$372 billion.

Net fee income rose 10% QoQ and 19% YoY to a record S$733 million, driven by loan-related activity and sustained wealth-management growth. Other non-interest income fell 41% QoQ and 29% YoY to S$370 million, reflecting the absence of non-recurring divestment gains recorded in 2Q26 and lower trading and investment income. Customer-related treasury income reached a new high, supported by client engagement and demand for hedging solutions.

Trading and investment income declined 15% QoQ and 33% YoY to S$322 million. UOB said trading and investment income moderated amid less favourable market conditions.

Asset quality remained stable, with the NPL ratio improving to 1.5% from 1.6% in 2Q26. Total credit costs declined to 24 bp from 28 bp, while NPA coverage stood at 86%, or 269% after taking collateral into account.

For 2027, UOB expects NII to be above 2026 levels, supported by balance-sheet growth, alongside mid-single-digit loan growth and mid-to-high single-digit fee-income growth. Total credit costs are guided at 25-30 bp. UOB provided no specific guidance for trading and investment income.