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April’s 3M-SORA was down 5bps m-o-m to 1.05%, the lowest since July 2022, and fell by 142bps y-o-y, the smallest y-o-y decline in 11 months. Singapore loan growth the highest in 7 months (Mar26: +6.6%). Banks have maintained low-to-mid single-digit guidance. CASA rose 15% y-o-y and CASA ratio to deposits at 20.6% (Feb25: 20%), the highest in 40 months and a tailwind for banks, lowering funding costs and cushioning NIM compression.
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We expect FY26e PATMI to increase by 8% y-o-y as NII and NIM compression stabilise and fee income growth boosts earnings.
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Maintain NEUTRAL. MAS tightened monetary policy on 14 April by slightly steepening the S$NEER appreciation path, its first tightening this cycle, raising 2026 inflation forecasts to 1.5%-2.5% due to imported energy costs. This complements the Fed’s higher-for-longer stance, with markets now pricing in zero US rate cuts for the rest of 2026. The backdrop is NIM-supportive, with stabilisation expected from 2Q26 as deposit repricing flows through. Heightened market volatility continues to benefit capital markets income and wealth management fees, providing a meaningful offset to NII headwinds.
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3M-SORA y-o-y decline lowest in 11 months
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