Singapore banks' Q2 profits seen steady as non-interest income offsets NIM drop

Singapore's three major lenders are expected to report steady net profits for the quarter ended June 30 as net interest margins continue to edge lower, while non-interest income streams provide support.

DBS Group Holdings Ltd. is expected to post a net profit of S$2.84 billion for the second quarter, up 0.7% from S$2.82 billion a year earlier, according to consensus estimates on Visible Alpha, a part of S&P Global Market Intelligence. Oversea-Chinese Banking Corp. Ltd. (OCBC) is forecast to report a net profit of S$1.94 billion, up 6.6% from S$1.82 billion year over year, while United Overseas Bank Ltd. (UOB) is projected to deliver a net profit of S$1.41 billion, up 6% from S$1.33 billion a year earlier, according to the data.

"The NIM downtrend is not yet over" for Singapore banks, Lim Rui Wen, analyst at DBS Group Research, said in a report dated July 21. But with recent monetary policy tightening, interest rates are firming up, and a "bias toward higher rates should support sequential improvement in earnings," Lim said.

DBS' NIM is expected to fall to 1.86% in the quarter, down from 2.05% a year earlier, according to Visible Alpha estimates. OCBC's NIM is expected to decline by 18 basis points to 1.74% year over year, while UOB's NIM is expected to decrease to about 1.82% from 1.90%.

"We remain watchful of UOB's second-quarter provisions, as UOB continues to work through troubled commercial real estate loan exposures," Lim added.

UOB is expected to record one-off gains of about S$200 million in the second quarter from asset sales, including real estate assets in Singapore.

Non-interest income to support earnings

OCBC's income is likely to be resilient across wealth management and market trading, with a smaller quarter-over-quarter decline for NIM, Lim said.

"Net interest income growth, stronger-than-expected loan growth, an acceleration in net new money inflow, which can suggest stronger growth of its wealth management fees, and an upward revision to its dividend policy are key upsides for OCBC," Wee Kuang Tay, analyst at CGS International, said in a research report dated July 21.

CGS International has downgraded its rating for OCBC to "hold."

DBS Group, Singapore's largest lender by assets, noted that its non-interest income grew in the first quarter of 2026, supported by strong wealth management and trading income. The bank's commercial book non-interest income is expected to grow in the high single digits, with potential upside if market sentiment improves further, according to the DBS Group Research report dated July 8.

DBS is due to report second-quarter earnings Aug. 6, while OCBC and UOB will both report Aug. 7.

As of July 31, US$1 was equivalent to S$1.28.