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The banks\u2019 share prices have also been under pressure in recent weeks, along with the broader Singapore market, after climbing rapidly in the earlier part of the year.<\/p>\n
\u201cThe recent sell-off appears to reflect a combination of earnings disappointment and weaker macroeconomic sentiment,\u201d said an analyst from digital brokerage MooMoo.<\/p>\n
Further earnings weakness, deteriorating credit conditions or prolonged macroeconomic pressures could weigh on performance and share price, they added.<\/p>\n
However, credit quality, loan growth and wealth management remain key factors in the medium-term investment outlook, said the analyst.<\/p>\n
Looking ahead to 2027, analysts also noted that the banks are not in equal positions.<\/p>\n
\u201cDBS has the steadiest outlook,\u201d said Mr Cheng Chye Hsern, head of investment at Providend. The bank\u2019s management said net interest income has bottomed out, with mid-single-digit growth of total income expected next year.<\/p>\n
It has the highest profitability, but its share price is nearly three times its book value, compared with its historical average of 1.6 times.<\/p>\n
Mr Xiao of CMC Markets said DBS and UOB have different reasons for missing analysts\u2019 expectations.<\/p>\n
For DBS, the shortfall came from markets trading income plunging 65 per cent, signalling a rough quarter on the desks rather than any deeper issues, he said.<\/p>\n
However, UOB’s problem is harder to fix, he said: \u201cMargins are thinner, and costs keep rising into 2027.”<\/p>\n
OCBC said it expects loan growth to be in the low double digits for this year, and that it is well placed for higher rates. But its insurance arm, Great Eastern, will keep group earnings lumpier whenever bond markets move sharply, said Mr Cheng of Providend.<\/p>\n<\/div>\n
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