Singapore Banks

Research evidence excerpt

Singapore Banks

Macquarie Equity Research

07 July 2026

Banks

ASEANSingapore Banks

2Q26 preview: Rates picture more supportive

Jayden

Key Points Vantarakis

• Modestly rising SGD rates should support growth in both net interest

and non-interest income.

• For 2Q26, we are ahead of consensus for all three banks, seeing scope Singapore Banks Valuations

for fee income beats, and possible further upside from contained DBS OCBC UOB

Ticker DBS SP OCBC SP UOB SP

provisions. Market Cap US$m 147,340 89,116 52,208

ADV US$m 243.4 111.9 92.5• We turn more bullish on the sector, upgrading DBS and UOB to OP,

joining OCBC. In terms of upside, our pecking order moves to UOB > Price S$/sh 66.91 25.49 40.52

Target S$/sh 70.86 27.76 45.16

OCBC > DBS. Rec. O-P O-P O-P

26e Div yield % 4.9 4.3 4.1

12-mth TSR % 10.8 13.2 15.5

• For 2Q26, we anticipate 4% YoY growth in pre-provision operating Source: Company data, Macquarie Research, July 2026.

profit (PPOP) and net profit (NPAT), with non-interest income materially Prices as of 6 July 2026. With this report we upgrade

higher YoY. We are 3-4% ahead of Visible Alpha consensus, led primarily DBS and UOB to Outperform from Neutral. See Figs

by fee income (6% ahead). The macro backdrop has improved relative to 14-15 for EPS and TP changes.

end 1Q26 and there is scope for credit charges to be at the lower end of

Singapore Banks: 2Q26 reporting guidance (though we do not expect writebacks yet). dates

• SORA outlook more bullish. USD strength followed by US Fed hikes are Bank Reporting date

positive for SGD rates. In the near term, the gap between SORA (SGD) DBS 6-Aug

and SOFR (USD) could modestly decrease, followed by transmission of

OCBC 7-Aug

US Fed rate hikes to SGD rates. We now project ~71bps of SGD rate