Banks Share Prices At Record Highs: What Long-Term Investors Should Consider Now

SINGAPORE, 29 JULY 2026 —

Singapore’s three largest banks posted record share prices on Thursday after first-quarter profits beat expectations and dividend visibility stretched through 2027.

DBS Group Holdings closed at S$70.27, above its prior all-time high of S$68.50 on 2 January 2026. United Overseas Bank ended at S$44.19, surpassing its previous record of S$43.80 on 15 May 2026. OCBC reached a 20-year intraday high, according to bourse data compiled by the Singapore Exchange.

The gains reflect resilience in net interest income and fee-based revenue after Singapore’s central bank began trimming benchmark rates in late 2024. DBS reported net profit of S$2.9 billion in Q1 2026, ahead of OCBC’s S$2.0 billion and UOB’s S$1.4 billion, the lenders disclosed in separate quarterly filings.

Net interest margins have stabilised in the 1.95-2.10% range across the three banks, cushioning the blow from lower SIBOR, which has fallen 45 basis points since December 2024. DBS’s common equity tier-1 ratio stood at 14.8% as of 31 March 2026, while UOB and OCBC both reported CET1 ratios of 15.2%.

Returns on equity remained strong: DBS posted 17.0%, OCBC 13.0% and UOB 11.5%. Dividend payouts are underpinned by healthy capital buffers; the banks currently distribute around half to three-fifths of earnings as cash dividends.

The rally has pushed valuations above long-run averages. DBS now trades at 2.8 times book value and 17.6 times forward earnings, versus five-year medians of 1.7 times and 10.9 times. OCBC’s price-to-book has climbed to 1.9 times (from 1.2 times historically) and its forward price-to-earnings to 15.1 times (from 9.6 times). UOB’s multiples sit at 1.4 times book and 11.8 times forward earnings, modestly above its long-run averages of 1.2 times and 9.5 times.

Analysts at Maybank Kim Eng said in a 9 July note that the valuation premiums are justified by superior profitability and dividend visibility. “Management teams have guided dividend continuity through 2027,” the research house wrote.

Still, the banks face headwinds from further rate cuts. DBS chief executive Piyush Gupta told investors in May that every 25-basis-point drop in rates would shave roughly S$150 million off annual net interest income, though he expects fee income from wealth management and insurance to offset part of the loss.

OCBC’s wealth franchise contributed 26% of group revenue in Q1 2026, up from 21% a year earlier. UOB, meanwhile, is integrating Citigroup’s consumer-banking assets in Malaysia, Thailand, Vietnam and Indonesia, which chief executive Wee Ee Cheong said could add S$200 million to S$300 million in annual revenue once fully ramped.

Credit quality remains pristine. Non-performing loan ratios sit between 0.9% and 1.5%, well below the sector average of 2.1%, according to Bank Negara Malaysia data cited in the banks’ filings.

Long-only fund managers said they are trimming exposure to DBS and OCBC on valuation grounds but maintaining core positions in UOB for its lower multiples and ASEAN growth optionality. “We still see 5-7% total return potential over 12 months, driven by dividends and gradual margin recovery,” said a Kuala Lumpur-based portfolio manager who asked not to be named.

For Malaysian investors, the trio offer indirect exposure to Singapore’s resilient financial sector. Maybank Investment Bank estimates that if Singapore’s GDP growth stays above 3% in 2026, DBS and OCBC could deliver 8-10% earnings growth, translating to dividend yields of 4-5% on current prices.

Investors should watch three data points for signs of valuation reset: quarterly CET1 ratios, fee-income growth from wealth and insurance, and management guidance on dividend sustainability. The next set of quarterly results is due in late July.

Related: DBS · SGX · Singapore