Broker: CGS International
Date of Report: October 16, 2025
Excerpt from CGS International report.
Report Summary
- CGS International expects Singapore banks to report marginal net profit declines (0.5-1.6% qoq) for 3Q25, mainly due to lower interest rates outweighing improved investor sentiment.
- Net interest margins (NIMs) are under pressure from a further decline in SORA, leading to estimated 3.1-3.5% qoq declines in net interest income (NII), while deposit growth continues to outpace loan growth.
- Non-interest income (non-II) is expected to recover with buoyant quarterly growth, especially in wealth management and trading income, as investor sentiment improves post 2Q25 uncertainties.
- Asset quality remains stable with no significant deterioration expected; credit costs are likely flattish compared to the previous quarter.
- DBS is the sector top pick due to its strong dividend yield and resilient performance, though OCBC could see positive 3Q25 surprises from its wealth management and insurance business.
- Sector outlook remains Neutral due to ongoing uncertainties over future earnings growth with anticipated US interest rate cuts potentially impacting profitability in FY26.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website : https://www.cgsi.com
