- February’s 3-month SORA was down 2bps m-o-m to 1.16%, the smallest m-o-m decline in 20 months, and fell by 168bps y-o-y. Singapore loan growth has continued to climb (Jan26: +6.1%). Banks are guiding low to mid-single digit. CASA rose 12% y-o-y and CASA ratio to deposits at 19.8% (Dec25: 19.6%), a tailwind for banks, lowering funding costs and cushioning NIM compression.
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- We expect FY26e PATMI to increase by 7% y-o-y, as fee income growth will be partially offset by the decline in NII. All three banks have committed to complete their previously announced capital return plans.
3-month SORA decline slows
- Singapore's interest rates fell 2bps m-o-m to 1.14% in February, the smallest m-o-m decline in 20 months. Furthermore, February’s 3-month SORA fell by 168bps y-o-y, the smallest y-o-y decline in 8 months. The surge in capital inflows (Feb26 FX reserves: +10% y-o-y), as Singapore remains a “safe haven,” has driven interest rates sharply lower. We expect the 3-month SORA decline to taper off for the rest of the year as expectations of Fed rate cuts are lowered.
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4Q25 RESULTS HIGHLIGHTS
Fee income growth support earnings
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