DBS, OCBC and UOB Beat the STI in 1H 2026: Here’s What Drove the Rally

SINGAPORE, 24 JULY 2026 —

DBS, OCBC, and UOB Outperform Singapore's Straits Times Index in 1H 2026

The SPDR STI ETF, which tracks Singapore's Straits Times Index, returned 13.1% in the first half of 2026. However, the three major banks in Singapore - DBS Group, Oversea-Chinese Banking Corporation (OCBC), and United Overseas Bank (UOB) - outperformed the benchmark. OCBC led the pack with a total return of 28.2%, followed by DBS with 19.3%, and UOB with 15%. The trio are the largest components of the 30-index constituents and all three surpassed the benchmark's return.

The banks' outperformance is notable given that net interest margins (NIM) are falling during the period. Despite this, OCBC delivered a record total income of S$3.8 billion for the first quarter of 2026, up 5% year on year. However, net interest income fell 5% to S$2.2 billion as its NIM narrowed 0.28 percentage points to 1.76%. The decline in NIM was cushioned by a 9% year-on-year growth in loans on a constant currency basis. Non-interest income surged 23% to S$1.6 billion, making up more than 40% of total income, driven by a 24% rise in net fee income and a 34% jump in wealth management fees.

DBS also posted a record total income of S$5.95 billion, up 1% year on year, despite its NIM narrowing 0.23 percentage points to 1.89%. Non-interest income rose 10% to S$2.45 billion, driven by record wealth management fees of S$907 million. The bank's asset quality improved, with the non-performing loan ratio down to 1%. DBS was the only one of the three banks to raise its dividend this quarter, declaring S$0.81 per share. In contrast, UOB's net interest income fell 4% to S$2.3 billion, while non-interest income declined 12% to S$1.1 billion. However, the bank completed its Citi consumer banking integration across Indonesia, Malaysia, Thailand, and Vietnam, and now serves more than 8.5 million retail customers across ASEAN.

The outperformance of the three banks is likely to have a positive impact on the Malaysian market, given the close economic ties between Singapore and Malaysia. The banks' ability to replace lost income from falling interest rates with non-interest income is a positive sign for investors. UOB's enlarged franchise, which now serves over 8.5 million retail customers across ASEAN, is also likely to benefit the Malaysian market. The bank's completion of the Citi consumer banking integration across Indonesia, Malaysia, Thailand, and Vietnam is a significant development that could drive growth in the region.

In terms of sector-specifics, the banking sector in Singapore is likely to continue facing challenges from falling interest rates. However, the ability of DBS, OCBC, and UOB to adapt to these changes and replace lost income with non-interest income is a positive sign. The banks' focus on wealth management and fee-driven income is also likely to drive growth in the sector. As the banks continue to navigate the challenges of falling interest rates, investors will be watching closely to see if they can maintain their non-interest income growth.

Looking ahead, investors will be watching to see if the non-interest income growth of the three banks can be sustained. The banks' ability to adapt to changing market conditions and replace lost income with non-interest income will be crucial in driving growth. With the Singapore market having faced significant challenges in recent years, including the 2008 financial crisis, 2020 COVID-19 pandemic, and 2022 economic downturn, the ability of DBS, OCBC, and UOB to outperform the benchmark is a positive sign for investors. Details on the banks' future growth prospects are not yet available, but their performance in the first half of 2026 is a promising start.

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