The banks’ share costs have additionally been underneath strain in latest weeks, together with the broader Singapore market, after climbing quickly within the earlier a part of the 12 months.
“The latest sell-off seems to replicate a mix of earnings disappointment and weaker macroeconomic sentiment,” mentioned an analyst from digital brokerage MooMoo.
Additional earnings weak spot, deteriorating credit score situations or extended macroeconomic pressures may weigh on efficiency and share worth, they added.
Nevertheless, credit score high quality, mortgage development and wealth administration stay key components within the medium-term funding outlook, mentioned the analyst.
DIVERGING PATHS?
Looking forward to 2027, analysts additionally famous that the banks are usually not in equal positions.
“DBS has the steadiest outlook,” mentioned Mr Cheng Chye Hsern, head of funding at Providend. The financial institution’s administration mentioned web curiosity earnings has bottomed out, with mid-single-digit development of whole earnings anticipated subsequent 12 months.
It has the best profitability, however its share worth is almost 3 times its e book worth, in contrast with its historic common of 1.6 instances.
Mr Xiao of CMC Markets mentioned DBS and UOB have totally different causes for lacking analysts’ expectations.
For DBS, the shortfall got here from markets buying and selling earnings plunging 65 per cent, signalling a tough quarter on the desks reasonably than any deeper points, he mentioned.
Nevertheless, UOB’s downside is more durable to repair, he mentioned: “Margins are thinner, and prices maintain rising into 2027.”
OCBC mentioned it expects mortgage development to be within the low double digits for this 12 months, and that it’s effectively positioned for greater charges. However its insurance coverage arm, Nice Jap, will maintain group earnings lumpier at any time when bond markets transfer sharply, mentioned Mr Cheng of Providend.