Singapore Banks 2Q25 Round-up - UOB Kay Hian 2025-08-11: Delivers Resilient Earnings Despite NIM Compression

- Read this at SGinvestors.io -

Banks provide an attractive dividend yield of 5.9% for 2025.

DBS better at weathering lower benchmark interest rates.

• Banks suffered severe NIM compression as 3M Compounded SORA dropped 50bp, while 3M HIBOR collapsed 220bp in 2Q25. DBS’ NIM compression was relatively shallow at 7bp q-o-q to 2.05% in 2Q25, mitigated by balance sheet hedging. OCBC and UOB’s NIM compression was more pronounced at 12bp and 9bp q-o-q respectively to 1.92% and 1.91%. Thus, DBS’ net interest income expanded marginally by 1.5% y-o-y, compared with declines of 6.0% y-o-y for OCBC and 2.7% y-o-y for UOB.

UOB strengthened its deposit franchise.

• Read more at SGinvestors.io.

Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2025-08-11

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