Top bank stocks to watch in Singapore

Singapore bank stocks market overview 2025

Singapore bank stocks have been strong performers, with the sector reaching near-record highs following exceptional 2024 earnings.

DBS led with a 43.9% share price increase, while UOB and OCBC gained 27.7% and 28.4% respectively⁴.

The three major banks - DBS Group (SGX: D05), OCBC (SGX: O39) and UOB (SGX: U11) - represent approximately 53% of the Straits Times Index (STI)⁵, making them important for Singapore's market performance.

Current market dynamics affecting Singapore banks

Interest rate environment: Singapore's three-month SORA has declined from 3.02% to 2.55% as of end-March 2025⁶, following global monetary easing trends. While this pressures net interest margins (NIMs), banks are offsetting impacts through loan growth and fee income expansion.

Regulatory landscape: The Monetary Authority of Singapore (MAS) has introduced new tokenisation frameworks, with OCBC becoming Singapore's first bank to issue tokenised bonds in January 2025⁷.

Economic outlook: Singapore's GDP growth is expected to moderate to 0.0-2.0% in 2025 from 4.4% in 2024⁸, driven by global trade uncertainties and policy changes.

Why Singapore bank stocks attract investors

Record-breaking financial performance

All three Singapore banks reported record profits for 2024, with total income growth ranging from 10-11% year-on-year⁹. This strong performance was driven by:

• Higher net interest income from elevated interest rate environment
• Robust wealth management fee growth
• Strong credit quality with low non-performing loan ratios
• Efficient cost management

Attractive dividend yields

Singapore bank stocks offer some of the market's most attractive dividend yields:

Strong fundamentals and risk management
 

• Capital adequacy: All three banks maintain strong Common Equity Tier 1 (CET1) ratios above 15%¹³
• Asset quality: Non-performing loan ratios remain low (0.9-1.5%)¹⁴
• Return on equity: Industry-leading ROE between 12-18.8%¹⁵
• Regional diversification: Exposure to high-growth Southeast Asian markets

Three major Singapore bank stocks analysis

1. DBS Group (SGX: D05) - The digital leader
 

Current price: S$44.46 (as of June 2025)¹⁶
Average price target: S$46.00¹⁶

Key highlights:

• Market leadership: Largest bank in Southeast Asia by assets
• Digital innovation: Multiple awards for digital banking excellence
• Strong profitability: ROE of 18.8%¹⁵, highest among Singapore banks
• Dividend strategy: Quarterly dividend of S$0.60 plus innovative 'capital return' dividend of S$0.15 per quarter for 2025¹¹

2024 performance highlights:

• Net profit growth of 12.2% year-on-year¹⁷, the highest among the three banks
• Net interest income increased 5% to S$15 billion¹⁷
• Strong fee income growth from wealth management

Why consider DBS:

DBS Group combines digital transformation leadership with consistent profitability. The bank's regional expansion and technology investments position it well for future growth.

2. OCBC (SGX: O39) - The dividend option
 

Current price: S$16.07¹⁶
Average price target: S$16.91¹⁶

Key highlights:

• High dividend yield: 5.16% trailing 12-month dividend yield¹⁰
• Superior asset quality: Lowest NPL ratio at 0.9%¹⁴
• Insurance integration: Owns Great Eastern Holdings, providing diversified income streams
• Operational efficiency: Lowest cost-to-income ratio at 38.9%¹⁸

2024 performance:

• Stable profitability with focus on efficiency
• Strong capital position with CET1 ratio of 17.6%¹³
• Consistent dividend payments with 60% payout ratio target¹⁹

Why consider OCBC:

OCBC offers attractive valuation among Singapore banks with consistent dividend payments, making it suitable for income-focused investors.

3. UOB (SGX: U11) - The regional growth story
 

Current price: S$34.59¹⁶
Average price target: S$37.30¹⁶

Key highlights:

• Regional expansion: Strong presence in ASEAN markets, especially Thailand and Indonesia
• SME focus: Market leader in small and medium enterprise banking
• Improving efficiency: ROE improved to 14.3% from 13.9% year-on-year¹⁵
• Conservative management: Prudent risk management with stable credit quality

2024 performance:

• High single-digit loan growth expectations for 2025²⁰
• Double-digit fee income growth anticipated²⁰
• Strong capital position with CET1 ratio of 15.4%¹³

Why consider UOB:

UOB offers exposure to Southeast Asia's growth story with conservative risk management and improving profitability metrics.

Current analyst ratings and price targets

Key analyst themes for 2025:
 

1. Net interest margin pressure: Singapore's largest banks are likely to face pressure on margins as the global interest rate cycle eases²²
2. Fee income resilience: Wealth management and transaction fee growth offsetting NIM compression
3. Credit quality stability: Benign credit costs expected in 2025
4. Capital returns: Continued strong dividend payments and share buybacks

How to trade Singapore bank stocks with IG

Trading options available
 

1. CFD trading

• Trade on price movements without owning underlying shares
• Leverage available for enhanced exposure
• Go long or short based on market outlook
• Tight spreads starting from 0.10% for Singapore shares

2. Direct market access (DMA)

• Trade directly through SGX order book via L2 Dealer platform
• Full market depth and transparency
• Institutional-grade execution
• Real-time market data

Step-by-step trading guide
 

Step 1: Market analysis

• Use fundamental analysis to assess bank financials
• Apply technical analysis for entry/exit timing
• Monitor interest rate trends and regulatory changes
• Track earnings announcements and guidance updates

Step 2: Risk management

• Set appropriate position sizes based on portfolio allocation
• Use guaranteed stops to limit downside risk
• Consider correlation between the three major banks
• Monitor sector concentration risk

Step 3: Trade execution

• Choose between CFDs for leveraged exposure or DMA for direct ownership
• Set entry and exit levels based on technical analysis
• Consider dividend dates for income strategies
• Monitor market news and earnings calendars

Risk factors and market outlook 2025

Key risks to monitor
 

Interest rate sensitivity: Singapore banks face headwinds from declining interest rates. DBS is likely to report a 4.4% year-on-year decline in net income, while OCBC's net income is expected to drop by 5.7% in Q1 2025²³.

Economic slowdown concerns: Singapore's GDP growth expected to slow to 0.0-2.0% in 2025⁸, potentially impacting loan demand and credit quality.

Global trade tensions: Ongoing trade policy uncertainties could affect Singapore's trade-dependent economy and banking sector performance.

Competition and disruption: Fintech competition and digital transformation costs continue to pressure traditional banking models.

2025 market outlook
 

Positive factors:

• Continued dividend growth from strong capital positions
• Fee income diversification reducing interest rate sensitivity
• Regional growth opportunities in Southeast Asia
• Digital transformation benefits materialising

Challenges:

• Net interest margin compression from lower rates
• Slower economic growth impacting loan demand
• Increased provisioning if credit conditions deteriorate
• Regulatory compliance costs

Footnotes

_{¹ https://secure.fundsupermart.com/fsmone/article/rcms328860/singapore-banks-facing-slower-growth-but-richer-yields-ahead}

_{² https://www.stashaway.sg/r/ocbc-dbs-uob-singapore-bank-stock}

_{³ https://www.stashaway.sg/r/ocbc-dbs-uob-singapore-bank-stock}

_{⁴ The Smart Investor, 'DBS, OCBC and UOB All Reported Record Profits: Which Bank Should You Buy?', 7 March 2025}

_{⁵ Singapore Market 2025 Outlook, Moomoo Community, 2025}

_{⁶ IG Singapore, 'DBS and OCBC likely to report lower net income y-o-y; UOB's net income to grow at slower pace', The Edge Singapore, 9 May 2025}

_{⁷ Global Legal Insights, 'Banking Laws and Regulations 2025 | Singapore', 11 March 2025}

_{⁸ MAS Monetary Policy Statement, April 2025}

_{⁹ StashAway Singapore, 'OCBC vs DBS vs UOB Singapore's Leading Bank Stocks for 2025', 25 January 2025}

_{¹⁰ StashAway Singapore, 'OCBC vs DBS vs UOB Singapore's Leading Bank Stocks for 2025', 25 January 2025}

_{¹¹ Growbeansprout.com, 'DBS, UOB and OCBC raise dividends. Still attractive at 6% yield?', 21 March 2025}

_{¹² The Smart Investor, 'DBS, OCBC and UOB All Reported Record Profits: Which Bank Should You Buy?', 7 March 2025}

_{¹³ Growbeansprout.com, 'DBS, UOB and OCBC raise dividends. Still attractive at 6% yield?', 21 March 2025}

_{¹⁴ StashAway Singapore, 'OCBC vs DBS vs UOB Singapore's Leading Bank Stocks for 2025', 25 January 2025}

_{¹⁵ Syfe, 'Singapore Bank Stocks at All-Time High: Buy DBS, OCBC, or UOB?', 14 November 2024}

_{¹⁶ The Edge Singapore, 'DBS and OCBC likely to report lower net income y-o-y', 9 May 2025}

_{¹⁷ The Smart Investor, 'DBS, OCBC and UOB All Reported Record Profits: Which Bank Should You Buy?', 7 March 2025}

_{¹⁸ StashAway Singapore, 'OCBC vs DBS vs UOB Singapore's Leading Bank Stocks for 2025', 25 January 2025}

_{¹⁹ Global Legal Insights, 'Banking Laws and Regulations 2025 | Singapore', 11 March 2025}

_{²⁰ Growbeansprout.com, 'DBS, UOB and OCBC raise dividends. Still attractive at 6% yield?', 21 March 2025}

_{²¹ Syfe, 'Singapore Bank Stocks at All-Time High: Buy DBS, OCBC, or UOB?', 14 November 2024}

_{²² S&P Global, 'Singapore banks face margin pressures in 2025 as interest rates head south', 20 January 2025}

_{²³ The Edge Singapore, 'DBS and OCBC likely to report lower net income y-o-y', 9 May 2025}