- We see a mixed bag for Singapore banks (SG Banks) ahead. Positives include a sanguine macroeconomic backdrop, wealth management business that should benefit amid a low interest rate environment, positive investor sentiment, continued inflows, and stable asset quality, offset by lingering NIM pressure and elevated sector valuations.
- - Read this at SGinvestors.io -
2025 was a good year for SG Banks but more modest returns are likely for 2026.
- Despite the sharp sell-off during the height of the US tariff uncertainties in Apr 2025, the sector subsequently recovered strongly to end 2025 with double-digit total returns, outperforming peers in Malaysia and Indonesia.
- - Read this at SGinvestors.io -
We estimate Singapore’s 2026 GDP growth at 3%.
- We estimate Singapore’s 2026 GDP growth at 3% on resilient external demand and momentum across manufacturing-and trade-related sectors, including spillovers from the electronics upcycle and sustained technology demand. Inflation is set to edge higher, with both headline and core inflation firming to ~1.5% in 2026 as local demand stays resilient.
- We also see scope for further S$ strength on Monetary Authority of Singapore’s (MAS) mild appreciation bias and a US$/S$ path that stays skewed lower.
- We expect two US Federal Funds Rate (FFR) cuts (50bps in total) in 2026, which is likely to lead to a measured Singapore Overnight Rate Average (SORA) dip. Global and local rate declines should still underpin demand for yields.
2026 sector outlook – non-II to drive operating income again.
- Read more at SGinvestors.io.
