Singapore Banks Lean on Wealth Boom as Rate Pressure Bites

Singapore's three largest banks are weathering a low-interest-rate environment by leaning into the region's wealth boom, with record fee income from wealth management and other services offsetting pressure on core lending operations.

OCBC, the city-state's second-largest lender, reported a 22% jump in April-June net profit to S$2.22 billion, comfortably beating market expectations. Smaller rival UOB posted a 10% rise to S$1.5 billion, also ahead of forecasts. The results follow a similar trend at DBS, as well as regional peers HSBC and Standard Chartered, all of which have benefited from rising affluent clientele in Asia.

Wealth management income hit record levels for both banks in the first half of the year — S$3.29 billion for OCBC and S$717 million for UOB. This helped counter a decline in net interest margins, a key gauge of lending profitability, across all three Singapore lenders.

The Monetary Authority of Singapore noted in its annual report that total assets under management in the country rose 10.1% to S$6.7 trillion by end-2025, underscoring the city-state's status as a preferred wealth hub.

UOB, however, trimmed its full-year fee-income growth outlook to low single digits from high single digits, citing delayed "sizeable deals" and weaker credit card fee income. Its trading and investment income also fell 8% year-on-year. Still, growth in key Southeast Asian markets cushioned its bottom line.

"ASEAN is our home ground, our competitive advantage and our engine of growth," said UOB CEO Wee Ee Cheong, pointing to stronger trade flows and supply chain shifts into the region.

OCBC's non-interest income surged 51% in the second quarter, driven by higher fees, trading income, and insurance revenue. The bank raised its full-year loan-growth forecast to high-single-digit or low-double-digit, up from a previous mid-single-digit estimate.

CEO Tan Teck Long cautioned that geopolitical tensions, particularly the Middle East conflict, could cloud the global outlook. "A lot will depend on how the energy crisis triggered by the U.S.-Iran war pans out," he said.

Both banks increased their interim dividends — OCBC to 47 Singapore cents per share and UOB to 88 cents.