Singapore banks to post loan growth but margins to dip in Q2

SINGAPORE, 29 JULY 2026 —

Singapore's banking sector is expected to post an increase in loans and earnings for the second quarter, with OCBC potentially reaching its full-year loan growth guidance by the first half. According to a report, the country's banks will likely report a rise in loans, driven by a strong economy. However, net interest margins (NIMs) are expected to dip during the same period.

The development in Singapore's banking sector may have implications for the Malaysian market, particularly in terms of trade and investment flows between the two countries. However, the expected rise in loans and earnings in Singapore may indicate a positive trend for the broader ASEAN region, including Malaysia.

Malaysian banks may take cue from the performance of their Singaporean counterparts, potentially influencing their own lending and investment strategies.

The report highlights that OCBC may reach its full-year loan growth guidance by the first half, indicating a strong performance by the bank. Singapore banks, in general, are expected to report an increase in loans and earnings for the Q2 period. However, the dip in NIMs may affect their profitability.

Looking ahead, the performance of Singapore's banking sector in the second quarter may set the tone for the rest of the year. If the trend of rising loans and earnings continues, it could have a positive impact on the broader ASEAN economy, including Malaysia. However, the decline in NIMs may pose a challenge for banks in the region, including those in Malaysia, as they navigate the complexities of the current economic environment.

Details on the future outlook and potential implications for Malaysian banks will be closely watched in the coming months.

Related: OCBC · Singapore