DBS (SGX:D05)'s 4Q25 was behind expectations, largely from weaker trading. This is recovering so far in FY26E.
It is well placed to benefit from continued liquidity flows to Singapore, which should lower downside risks to interest income, while driving upside to fees – especially in wealth management and capital markets. Scaling AI should start to deliver cost efficiencies going forward.
- Read this at SGinvestors.io -
NII and NoII support to continue in FY26E
4Q25 NIMs fell -3bps q-o-q and momentum is falling (-9bps q-o-q in 3Q). Management claims Jan NIMs are -1bps lower, which signals stabilisation. China, Taiwan, India are showing improving growth. Coupled with strong SG fundamentals, we forecast loans to increase +5.5% y-o-y in FY26E vs +3.3% FY25. This should limit downside NIM risks.
- Read this at SGinvestors.io -
Trading disappointed in 4Q. However, this is stronger in Jan/Feb, according to Management. We conservatively forecast flat y-o-y trading in FY26E.
While wealth management was slower q-o-q from seasonal factors, AUM was 3% higher. DBS’ strong scale together with lower rates should drive stronger wealth management growth in FY26E. Rising capital market activities stacks IB&A and treasury customer income on the upside.
We raise FY26-27E non-interest income by 4% each.
NPLs benign. AI efficiencies starting to flow through
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
